Puma has said it would reduce the number of products its makes and continue with its store closure operation following a 29.2% drop in profits in the second quarter of the year.
Net profits at the group fell €26.7m (£20.9m) in the three months to June 30 despite revenues rising 11.8% to €752.9m (£589.7m).
Over the first half of the year net profit fell 12.8% to €100.6m (£78.8m). Puma said the current economic climate, particularly in Europe, had put a strain onto gross margins.
The sportswear firm said that it would look to streamline its product range by reducing the number of pieces it develops. The company will also continue its focus on shutting underperforming stores and opening others in profitable locations, particularly emerging markets.
Puma chief exectuive officer Franz Koch, said: “Despite the poor consumer sentiment and challenging business environment particularly in Europe, PUMA achieved respectable sales growth in the second quarter and first half of this year.”
He added that pressure on gross profit margins and strategic investments in combination with a weakening European business had impacted second quarter net earnings. “We have therefore taken measures to secure sustainable and profitable growth by broadening the scope of our Transformation Program. This program is designed to reduce complexity and establish a more efficient business model, operating on a leaner cost base,” said Koch.
Last Wednesday the company issued an unscheduled statment with a profit warning ahead of the second quarter results.The sporting goods business reiterated that it expects a drop in the profits for its full year results from the €230.1m (£180.2m) last year.
Meanwhile general manager finance Michael Lammermann has been promoted to chief financial officer and will take up the role on January 1, 2013. Chief operating officer Klaus Bauer will leave Puma at the end of the year but his successor is yet to be announced.