- Puma cut its 2025 outlook citing sector-wide and company-specific challenges, including tariffs.
- The sportswear brand said it expects full-year sales to decline by a low-double digit percentage this year.
- It also expects an operating profit loss in 2025.
After the German sportswear company reported lower-than-expected second-quarter sales and lowered its full-year estimate, citing the impact of U.S. trade tariffs, Puma shares fell as high as 18% on Friday.
With NBC 7, you can watch San Diego News for free, anywhere, at any time.
In a preliminary update following Thursday’s market closure, the company stated that, in contrast to its previous prediction of low- to mid-single digit sales growth, it anticipates full-year sales to drop by a low-double digit percentage this year.
Additionally, Puma stated that it anticipates reporting a loss on operational profits in 2025, a significant departure from the 445 million euro ($523 million) profit it had projected before evaluating the impact of tariffs.
With our News Headlines email, you can receive the best local San Diego stories every morning.
The company’s stock decreased 17% at 11:00 a.m. London time (6:00 a.m. ET), reducing losses somewhat.
“Amid ongoing volatile geopolitical and macroeconomic volatility, Puma anticipates that both sector-wide and company-specific challenges will continue to significantly impact performance in 2025,” the business stated in a statement.
Money Report
Why Americans love gated communities
What Europe’s response to a no-deal with Trump could look like
“Key factors include muted brand momentum, shifts in channel mix and quality, the impact of U.S. Tariffs, and elevated inventory levels,” it stated.
Although the firm announced that it was cutting back on Chinese imports to the United States and that it would be raising prices starting in October for the fourth quarter, it stated that it still anticipates that U.S. tariffs will have a little negative effect on its 2025 gross profit of about 80 million euros.
It further stated that higher inventory levels were the result of frontloading deliveries to the United States before tariff deadlines.
Although he admitted internal shortcomings, CEO Arthur Hoeld, who was hired on July 1 to revitalize the struggling sportswear brand, stated that the firm should examine its product line as part of a broader brand overhaul.
“We, as a company, need to take a hard look at ourselves, the results the market has shown are clearly based on us as a company not delivering against our own expectations,” he stated in a press conference following the findings.
In the second quarter, Puma’s preliminary sales dropped 2% year-over-year on a currency-adjusted basis to 1.94 billion euros ($2.27 billion), which was less than the 2.06 billion analysts predicted in an LSEG survey.
After excluding one-time expenses, the quarterly adjusted operating profit showed a 13.2 million euro loss. In the second quarter, Puma incurred 84.6 million euros in one-time expenses, including those associated with its cost-efficiency initiative.
North America saw a 9% loss in sales, while Europe and Asia-Pacific saw declines as well.
As the store has dealt with trade constraints and dwindling consumer demand in the very competitive sportswear business, Puma’s share price has already halved this year.
Back in May, the business stated that it expected trade duties to result in price increases across the industry, but that it expected companies with more clout in the US to take the lead.
Markus Neubrand, the company’s chief financial officer at the time, stated, “We don’t want to be the leader in terms of the pricing change in U.S. markets,” “There are other players in our industry where the U.S. is far more relevant.”
Also on CNBC
-
Birkenstock gets an upgrade to buy from Goldman Sachs
-
McDonald’s to test CosMc’s-inspired drinks at more than 500 restaurants
-
Moncler raises prices on tariffs, may postpone store openings if downturn worsens
