German sportswear giant Puma has issued a grim update to investors, slashing its full-year outlook and warning of a potential operating loss in 2025. The company cited a cocktail of challenges—from weakening brand momentum to the impact of U.S. tariffs—as it reported disappointing second-quarter results.
The announcement sent Puma’s shares tumbling by as much as 18% in early Friday trading, before paring losses to a still-steep 15% decline by mid-morning in London. This marks another blow for the company, whose stock has already halved in value this year.
The revised forecast was issued in a preliminary update after markets closed on Thursday. Puma now expects 2024 sales to decline by a low-double-digit percentage, a sharp reversal from its previous guidance of low- to mid-single-digit growth. More alarmingly, the company projected an operating loss for 2025, in stark contrast to earlier expectations of a €445–525 million profit.
According to Puma, the downgrade is due to a convergence of both macroeconomic and internal issues. In a statement, the company pointed to “muted brand momentum, shifts in channel mix and quality, elevated inventory levels,” and especially the rising pressure from U.S. trade tariffs.
The U.S. market has proven particularly challenging. In the second quarter, sales in North America fell by 9%, dragging overall revenue down 2% on a currency-adjusted basis to €1.94 billion—well below the €2.06 billion consensus estimate from analysts. Europe and Asia-Pacific also posted declines, compounding the company's woes.
Puma’s adjusted operating profit for the quarter was a loss of €13.2 million, excluding one-time charges of €84.6 million tied to a cost-efficiency initiative.
To counteract the growing cost pressures, Puma has begun reducing imports from China and plans to raise prices starting in October. Despite these moves, it still expects a negative gross profit impact of approximately €80 million in 2025 due to tariffs on U.S. imports.
Newly appointed CEO Arthur Hoeld, who took the reins on July 1, struck a candid tone in a media briefing, acknowledging that many of the problems are self-inflicted.
“We as a company need to take a hard look at ourselves,” Hoeld said. “The results the market has shown are clearly based on us not delivering against our own expectations.”
As part of a broader strategic reset, Hoeld indicated that Puma will reassess its product lineup and overall brand direction. The company is hoping that these efforts, combined with pricing adjustments and supply chain recalibrations, will help restore investor confidence and reinvigorate consumer demand.
Still, with competition intensifying in the global sportswear market and consumer spending under pressure, Puma faces a tough climb ahead. While industry-wide pricing adjustments are underway in response to tariffs, Puma has been cautious not to lead those changes.
“We don’t want to be the leader in terms of the pricing change in U.S. markets,” Chief Financial Officer Markus Neubrand said back in May. “There are other players in our industry where the U.S. is far more relevant.”
For now, however, Puma is learning the hard way just how relevant the U.S. remains to its own fortunes.