Puma share price today: Shares of German sportswear brand Puma crashed 23 per cent on Thursday, January 23, after reporting lower than expected fourth-quarter sales and a drop in annual profit, raising questions about its ability to compete with bigger rivals Adidas and Nike. The stock fell as much as 19 per cent in Frankfurt trading, the biggest drop in more than two decades.
Puma lost more than a fifth of its market value on Thursday after the weak quarterly results highlighted the work Puma still faces to boost its brand and take a bigger slice of the $400 billion global sportswear market. The Herzogenaurach, Bavaria-based company pushed back profitability targets.
Rival Adidas reported strong sales and profitability amid the sustained boom in demand for retro sneakers, with the broad-based strength providing a stark contrast to Puma’s update. Puma shares ended 22.8 per cent lower at 32.3 euros on Wednesday, their worst day ever and hitting their lowest level since February 2018.
Puma has been relaunching shoes such as the 1999 motor racing-inspired "Speedcat" as it tries to muscle into a market dominated by Adidas' retro Samba soccer sneakers, but JPMorgan analysts said sales trends for the Speedcat have been weaker than expected so far.
Puma has increased spending on marketing to boost its brand perception, and the Speedcat is priced at 109.95 euros ($114.44) on its website, on par with Adidas' Samba – whereas Puma shoes have traditionally been cheaper than Adidas and Nike. Puma has said it aims to sell between four million and six million pairs of the Speedcat in 2025.
According to Bloomberg, Puma's fourth-quarter sales rose 9.8 per cent in currency-adjusted terms, below the 12 per cent growth expected by analysts. Puma's net profit last year fell to 282 million euros ($293 million) from 305 million, in part due to higher interest payments on its debt.
Puma CEO Arne Freundt had said in November he was confident about demand heading into the year-end shopping season. The strength of the US dollar poses a problem for Puma, which pays its Asian suppliers in dollars but makes a big share of revenues in euros.
On the back of the weak profit, Puma launched a cost-cutting programme aiming to reach an earnings before interest and tax (EBIT) margin of 8.5 per cent by 2027, up from 7.1 per cent in 2024. Puma is scheduled to provide more detailed guidance when it publishes its full-year report on March 12.
Puma also downgraded its profit margin guidance. Adidas shares have advanced more than 50 per cent in the past 12 months, while those of Puma have tumbled 19 per cent in that period. Earnings before interest and taxes rose to €109 million ($114 million) in the fourth quarter, short of the €131-million average of analyst estimates. Net income stood at €24 million for the period.
The gloomier outlook for Puma is a stark contrast from its messaging in November, Morgan Stanley noted. It is probably a result of a worse-than-expected performance in Latin America, a stronger US dollar, the increased risk of tariffs with China and Puma’s ongoing struggles to build brand momentum.
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