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Puma hails strong US growth

27 February 2004

HERZOGENAURCH – Puma, the German-based sports gear powerhouse, said Friday its US sales zoomed last year as young consumers snapped up its trendy footwear and clothing.

Despite the lagging economy, 2003 US sales jumped 42 percent year on year in dollar terms to a record 255.4 million dollars. With the dollar weak, that rise translated into a lesser 18.8 percent in euros, the currency the group uses for its accounting.

Chief executive Jochen Zeitz said Puma aimed to continue with overall growth of sales and earnings above 10 percent this year.

Based in the southern German town of Herzogenaurach, across the way from arch-rival Adidas, Puma lifted 2003 sales 40 percent to EUR 1.27 billion and doubled its pre-tax earnings to EUR 264.1 million.

Stockmarket-listed Puma nimbly evaded looming problems in a year where the two industry leaders, Nike and Adidas, battled to win over buyers with price cuts and Adidas admitted to a slippage in sales.

“We won’t be joining in the price war,” said Zeitz.

Puma has scored a hit with young Americans over the past three years with gear that is more often worn as casual clothing than to actually take part in sport.

“Puma is well on the way to further global expansion of its market share and market positioning as a coveted sports-cum-lifestyle brand,” said Zeitz. “Sport doesn’t stand for ‘traditional’: for us it means wellness, or luxury with a sporting flavour.”

He defended a fall in the growth rate to somewhere over 10 percent as “normal” after a phase where sales at the company – full name Puma AG Rudolf Dassler Sport – set a record.

Zeitz said the company would continue a buyback of its own shares, raising the target from 300,000 to 800,000 shares or 5 percent of the common stock. Puma is using cash in hand to buy the shares.

Puma stock rose 3.5 percent on the Frankfurt Stock Exchange Friday to EUR 161 after the figures and the buyback were unveiled.

Subject: German news