Puma slides on weak US demand and job cuts

Puma on Wednesday announced job cuts and warned of uncertain US consumer demand as the German sportswear group’s shares slumped 23% in the wake of disappointing quarterly and annual forecasts issued a day earlier.

The grim outlook, which follows weak quarterly sales and annual profit announced in January, has raised concerns over Puma's ability to compete with bigger rivals Adidas and Nike while fending off newer, fast-growing brands such as On Running and Hoka.

CEO Arne Freundt said Puma’s target consumers in the US were not spending due to economic uncertainty.

“February was bad. March has started off a bit better,” he said at a press conference.

CFO Markus Neubrand announced plans to cut 500 jobs worldwide and close some unprofitable stores as part of a cost-cutting plan.

Asked about the potential impact of US import tariffs, Puma’s management confirmed that Chinese production made up about 10% of shoe imports into the US, down from 30% in the past.

The company was urging suppliers to diversify production away from China to countries including Indonesia, they said.

Late on Tuesday, Puma forecast currency-adjusted sales for this quarter to grow in a low single-digit percentage, below last year’s level, with “significantly” lower operating earnings for the same period.

The firm said its annual currency-adjusted sales would grow in a low- to mid-single-digit percentage rate, compared with 4.4% growth to €8.82 in 2024.

It had previously expected 2025 growth to be stronger than in 2024.

The group forecast adjusted earnings before interest and taxes (ebit) of €520m-€600m for 2025, before a one-time charge of up to €75m related to its cost-cutting programme.

“While expectations have lowered recently, we still think this guidance is below the most conservative estimates and raises more questions,” Barclays analysts wrote in a note to investors.

Puma shares slumped 23% to €21.90 at midday, a level not seen since November 2016.

Puma’s larger peer Adidas, meanwhile, recorded a solid performance in 2024 and adopted a cautious stance for 2025.

“The stark contrast in regional performance and sell-through versus Adidas, in our view, underscores the importance of brand momentum in driving demand, but also orchestrating operational leverage amid a volatile retail environment,” said Felix Dennl, an analyst at Metzler in Frankfurt.

Sales of popular retro shoe models helped boost sales of brands including Puma and Adidas last year.

Puma said it still aims to sell 4-million to 6-million pairs of its relaunched motor racing-inspired “Speedcat” sneaker, though Freundt said an expected uptick in sales was taking longer than expected to materialise.

Reuters