Puma Shares Tumble on Profit Warning for 2025, Despite Growth in 2024

Updated 4:22 p.m. ET March 12

BERLIN — Puma may have been able to report growth after a lackluster year but the prognosis the company gave for 2025 saw the German sportswear brand’s shares fall to their lowest level in almost nine years.

More from WWD

• Puma and Formula 1 Launch 75th Anniversary Collection Celebrating Racing Heritage

• Puma, LaQuan Smith Back for Second Round With New Collection

• Puma Launches 'Next Level' Cost Savings Plan After Profit Miss

Puma shares lost more than 20 percent in value during initial trading in Germany Wednesday morning before recovering very slightly later in the day. In early May, shares had been valued at around 50 euros; this week they sank to around 22 euros.

In 2024, Puma sales rose 4 percent, in currency adjusted terms, to total 8.82 billion euros. That was following a 9.8 percent fillip in the fourth quarter. The rest of the year had been sluggish though, with sales either static or dipping slightly every quarter before recovering in the last three months.

Puma’s EBIT — earnings before interests and taxes — also remained static at 622 million euros in 2024.

The company had announced its guidance on Tuesday evening in Germany, before the release of official full-year results. It now expects growth this year to be in the low- to midsingle digits and for EBIT to come in somewhere between 520 million and 600 million euros. The latter is below market expectations.

Puma chief executive officer Arne Freundt said he was satisfied with 2024’s results but conceded that guidance for 2025 was “clearly below our initial expectations.”

“We achieved our highest sales ever,” Freundt told journalists at press conference at Puma headquarters in Herzogenaurach in southern Germany on Wednesday morning. “We are very pleased with this solid improvement…but while we are pleased how we have progressed in the top line, I am clearly not satisfied that we were not able to translate our growth into additional profitability.”

Market analysts from the likes of Royal Bank of Canada, Deutsche Bank and Warburg Research agreed, with several saying that Puma’s decent annual results were overshadowed by the unexpectedly conservative guidance and the company’s preemptive warnings about the first quarter this year.

Asked what had brought about the lower forecast, Freundt cited “the really soft market environment we have seen in the U.S.” Puma was already predicting that sales in the first quarter of this year would be down low-single digits compared to the same time in 2024.

“I think in January we couldn’t have foreseen what February would mean for the U.S.,” Freundt explained, noting that the North American market made up around a third of Puma’s total business. “And I don’t have a crystal ball to see how consumer sentiment there will be for the rest of the year. I do still see an opportunity to end 2025 with growth above last years.”

That was part of the reason Puma had given a broader range in its guidance than usual, he said. And as he repeated several times, the company was aware of the root causes of its problems and how these could be addressed.

To help address issues of profitability, Puma began work on a cost-savings program in January this year. It’s predicted EBIT for 2025 excludes a one-off cost of 75 million euros as a result of the program that executives say will “reduce complexity.” The money will go toward tasks like closing inefficient locations and reducing Puma’s 21,000 staff by about 500 roles. On Wednesday, Puma executives revealed that around 150 of the roles axed would be at corporate offices, and that the number of stores closing out of the around 1,000 the brand currently runs, would be in the low-single digits.

Freundt also outlined other measures being taken.

In 2024, in terms of product categories, the most growth came in Puma’s footwear, where sales rose 5.4 percent in currency adjusted terms to 4.73 billion euros. Apparel grew 3.7 percent to 2.81 billion euros while sales of accessories rose 2 percent to 1.27 billion euros.

All of these would be impacted by what Freundt called a “three pillar” strategy for coming years. Puma will “elevate” brand recognition this year — it launches a new brand campaign next week and will open a new flagship on London’s Oxford Street later this year— as well as enhance its credibility by further innovation in sports performance and then finally, also build heat in sports style offerings.

As executives at Puma’s larger German rival Adidas have also noted, the heat is going out of the “Terrace” trend, which was driven by retro models originally popularized by British football fans watching games on the terraces of sports stadiums. Now it’s the turn of so-called “low-profile” sneakers, something Puma hopes to exploit with its Speedcat and Mostro models.

“We can feel the momentum building up there,” Freundt agreed.

The low-profile sneakers were seen on the runway at the Balenciaga x Puma collaboration shown in Paris this week and a look that combined the Speedcat with a flat ballet slipper had been noticed after it appeared at Copenhagen Fashion Week, Freundt noted. The brand eventually hopes to sell between 4 million and 6 million pairs from the Speedcat family, he said.

During 2024, Puma saw the most growth in the Americas. There, after a slow first quarter, sales rose 7 percent to 3.54 billion euros in the full year. Of that, sales in North America went up 1.8 percent over the full year.

During the first three months of this year, Puma had seen demand from wholesale partners in the U.S. soften though, Freundt said. “The consumer in the low- to mid-income bracket shows a certain constraint perhaps because of increased insecurity in the current market environment, and is holding back on spending,” the Puma boss said.

Last year, in EMEA — Europe, the Middle East and Africa — Puma were up 2.1 percent and bought in 3.48 billion euros.

Asia-Pacific inched up gradually during the year to end 2024 with 3.8 percent growth. Puma said that Japan, India and Greater China all contributed to the growth. Sales in Greater China improved 5.6 percent over the year.

Best of WWD

• Harvey Nichols Sees Sales Dip, Losses Widen in Year Marred by Closures

• Nike Logs $1.3 Billion Profit, But Supply Chain Issues Persist

• Zegna Shares Start Trading on New York Stock Exchange

Sign up for WWD's Newsletter. For the latest news, follow us on Facebook, Twitter, and Instagram.