UPDATE 2-Puma counts on World Cup to kick start sales

* Q3 EBIT down 21.6 pct at 98 mln eur vs Rtrs poll 101 mln

* Q3 net earnings fall 24 pct to 68 mln eur vs poll 71 mln

* Expects FY sales to fall by low- to mid-single-digit rate

* Expects boost from soccer World Cup in 2010

* Shares rise 2.6 percent, outperform MDAX (Adds share price, detail and background)

By Eva Kuehnen

FRANKFURT, Nov 9 (Reuters) - Puma (PUMG.DE) is hoping next year's soccer World Cup in South Africa will jolt consumers out of a lethargy the German sports goods maker expects to last at least until the end of this year.

The world's number three behind Nike (NKE.N) and cross-town rival Adidas (ADSG.DE) said on Monday the market environment would remain challenging in the fourth quarter, but it still expected to post a profit.

Its third-quarter net earnings fell by almost a quarter, broadly meeting analysts' expectations.

For the full year, Puma said it expects currency-adjusted sales to decline at a low- to mid-single-digit percentage rate. Sales fell 2 percent in the first nine months of the year.

"We hope to see first signs of an improving business environment in the run up to the football World Cup in South Africa, where Puma through its strong ties with African Football has a home field advantage," Chief Executive Jochen Zeitz said.

Adidas is also banking on support from the tournament next year and said last week that its expects football fever to start gripping consumers in the fourth quarter already. [ID:nL4343623]

Both companies have said they were aiming for record sales with soccer-related products next year. [ID:nLE641707]

Sales of these sort of products account for a double-digit percentage of Puma's overall annual sales. The global market in this category is dominated by Adidas, with a market share of 34 percent, followed by Nike.

Puma shares rose 2.6 percent to 228.79 euros by 1008 GMT, outperforming a 1.7 percent gain in Germany's mid-cap index .MDAXI. Adidas shares were up 0.7 percent.

"Puma delivered an excellent working capital management," UniCredit analyst Uwe Weinreich said and pointed to a 17.5 percent drop in inventories.

GETTING INTO SHAPE

Official data showed last week that euro zone retail sales fell unexpectedly in September, putting a question mark over the strength of any economic recovery. [ID:nL5432089]

All three major sports goods makers have been slashing costs to address dwindling sales across the world as cash-strapped consumers reduce discretionary spending.

Puma aims to save up to 150 million euros ($224.6 million) from 2011 by closing stores, cutting some products and renegotiating contracts with athletes. It said the programme was "pretty much on track" and would be wrapped up by the end of the year.

Puma's third-quarter earnings before interest and tax fell 21.6 percent to 98 million euros, in line with the average estimate in a Reuters poll of analysts, on sales of 673 million euros, down 6 percent adjusted for currency fluctuations.

Puma's parent company, French retailer PPR (PRTP.PA), already issued key figures in October when reporting its own results. [ID:nLK564790]

Puma trades a discount to its peers, at 14.2 times 12-month forecast earnings. Adidas has a multiple of 15.3 and market-leader Nike 17.1, according to Thomson Reuters StarMine. ($1=.6678 euros) (Editing by Michael Shields and Mike Nesbit)