Puma says tariffs, geopolitical tensions will hurt sales this year
What's the story
Puma, the famous German sportswear company, has warned of another year of slow growth in 2025. The company's forecast is impacted by global tariff wars, currency fluctuations, and geopolitical tensions. In a recent statement, Puma predicted its adjusted earnings to fall between €520 million and €600 million before interest and taxes. This projection is below the average estimate of €674 million by analysts.
Sales outlook
Puma's sales growth forecast disappoints
Puma also predicted its currency-adjusted sales would grow in the low- to mid-single-digit range, missing expectations. Following this disappointing news, Puma's shares fell on Tradegate ahead of regular trading in Frankfurt. Over the last year, the company's stock has declined by 32%, lagging behind competitors Adidas AG and Nike Inc.
Market challenges
Future growth and profitability targets in question
The latest forecast raises concerns about Puma's ability to gain traction with its brand and key shoe models. These models include the 1990s-era Speedcat sneaker, which has been carefully incubated by CEO Arne Freundt for mass production. The forecast also questions Puma's goal of achieving an 8.5% EBIT margin by 2027—a target that was already pushed back two years when preliminary fourth-quarter figures were released in January.
Strategic focus
CEO's strategy and market performance
Since Freundt took over as CEO at the end of 2022, Puma's sales growth has slowed. Freundt has stressed that Puma needs to focus on developing more premium sneaker models like the Speedcat that can command higher prices. However, in Q1, the firm struggled with weak demand in both the US and China, leading to earnings for this quarter likely coming in "significantly below" last year's results.
Financial adjustments
Cost-cutting measures and earnings expectations
Puma expects one-time costs of around €75 million this year as part of its efficiency efforts. These cost cuts are tipped to add an extra €100 million to earnings this year, excluding interest and taxes. For the complete year, including such one-time costs, Puma expects that measure of earnings to be between €445 million and €525 million—much lower than last year's results.