Puma has warned that trade uncertainty and geopolitical tensions will hit sales growth this year, sending the German sportswear group’s shares to their lowest level since 2016.
Shares in the company fell nearly 23 per cent on Wednesday morning after it predicted a drop in operating profits this year and said sales adjusted for currency changes were expected to grow by a “low-to mid-single digit” rate.
Puma said “trade disputes” were hitting demand in its key markets, such as North America and China, and forecast earnings before interest and taxes of between €445mn and €525mn for 2025.
The range, which includes €75mn in one-off costs related to its efficiency programme, is well below the €690mn analysts had expected and the €622mn it made last year.
Puma shares have lost about 50 per cent of their value since the start of the year, suffering a more than 20 per cent fall over a single day in January when it missed its profit target for 2024.
On Wednesday, chief executive Arne Freundt said he was “not satisfied” with the company’s “stagnant profitability” and promised “decisive actions” through a cost-cutting programme first announced in January.
“We are fully aware of the root causes of our challenges and are addressing them with full focus and rigour,” he said.
The company also predicted weaker demand in the first few months of the year “due to a soft performance in the US and China”. Puma said currency adjusted sales would come in at a “low-single-digit” behind the first quarter of 2024, while operating profit would be “significantly below” the €160mn it reported for the same period last year.
While Puma has largely missed out on the retro trainer boom that has driven sales at rival Adidas, it is betting on the Speedcat — a retro-style racetrack-inspired shoe — to become a bestseller.
Freundt said sales of the Speedcat looked “promising” and would be scaled up this summer, but analysts at Citi warned that the company’s muted first-quarter guidance pointed to “poor momentum” for the model.
Puma said its cost-cutting programme would include reductions in personnel and a simplification of its product range. The initiative is expected to add €25mn to 2025 operating profit, net of expenses.
The company is targeting an operating margin of 8.5 per cent by 2027, up from 7.1 per cent in 2024. Puma cut its dividend to €0.61 per share, down from €0.82 the previous year.
