German sportswear brand Puma has issued a warning that sales growth would be in the low to mid-single-digit percentage range in 2025.
The cautious outlook comes as the brand reported a sales rise of 4.4% to €8.81bn for the full year 2024. The increase has been credited to growth across all regions, product divisions and distribution channels.
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However, net income saw a decline of 7.6% to €281.6m – below expectations – with earnings per share dropping to €1.89 from €2.03 in 2023.
The company noted that this decline was primarily due to lower-than-anticipated sales and earnings before interest and taxes (EBIT). The result was affected by increased net interest expenses, higher non-controlling interests and a rise in the tax rate.
The EBIT for the fiscal year 2024 remained stable at €622.0m, resulting in an EBIT margin of 7.1%, a drop of 10 basis points.
During the fiscal year, Puma’s gross profit margin improved by 100 basis points to 47.4%, up from 46.3% in fiscal 2023.
Puma CEO Arne Freundt stated: “I am pleased that we delivered a solid sales growth on a currency-adjusted basis and improved our gross profit margin in 2024. We made significant progress with our brand elevation strategy, enhancing our brand perception among consumers and achieving strong growth in our performance categories.”
“However, despite these successes, I am not satisfied with our stagnant profitability. We must address our current cost trend and we have already been taking decisive actions to improve the situation with our next level programme. Our outlook for 2025 is below the expectations we set a year ago, both in terms of top and bottom lines. We are fully aware of the root causes of our challenges and are addressing them with full focus and rigour.”
Looking ahead to 2025, Puma anticipates ongoing geopolitical tensions and macroeconomic headwinds, including trade disputes and currency fluctuations, which could dampen consumer confidence and demand in key markets.
For a more accurate assessment of business performance, Puma has provided an EBIT outlook for 2025 that excludes one-time expenses.
Taking into account these one-time costs and the net effects of the next level programme, along with continuous investments in marketing, retail stores and infrastructure, Puma projects an adjusted EBIT ranging between €520m and €600m for fiscal 2025.
Puma chief financial officer Markus Neubrand has disclosed plans to eliminate 500 positions across its global workforce in cost cutting measures, as reported by Reuters.
During a press conference, Arne Freundt revealed that of the total job cuts, 150 would affect employees at Puma’s headquarters.
The sportswear manufacturer has 21,000 employees worldwide.
Neubrand also indicated that Puma would also be shutting down select stores that are not profitable.
In November 2024, Puma introduced its Vision 2030, a set of sustainability goals aimed at enhancing the company’s impact across several key areas, including climate action, circularity and human rights.
