Puma feels impact of a strong US dollar

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Puma predicted a strong US dollar and currency fluctuations would weigh on earnings this year after the German sportswear company suffered a surprise loss in the last three months of 2014.

Puma promised to take steps including price increases to blunt this impact, meaning it should be able to achieve a slight increase in core earnings and net profit in 2015.

The impact of the dollar’s strength was already evident in the fourth quarter when the company reported a net loss of 4.6 million euros (£3.4m), compared with forecasts for a net profit of 7 million.

The sportswear industry sources the vast majority of products from Asia in US dollar contracts. Puma said the weakness of the Russian rouble was also hurting, as was volatility in the Mexican and Argentine peso and Polish zloty.

The loss came despite a 7.5 per cent rise in quarterly sales to 751 million euros that beat average analyst forecasts. Sales were driven by strong growth in the Americas, where Puma makes a third of its sales, up a currency adjusted 15 per cent.

Majority owned by French luxury goods group Kering, Puma is a distant third in the sportswear market behind Nike and Germany’s Adidas.

Puma has been spending heavily on marketing and sponsorship in trying to restore its reputation as a sports performance brand.