PUMA Faces Significant Stock Decline Due to Expected Annual Losses
PUMA’s stock dropped by 16% on Friday after the German sportswear brand announced it anticipates annual losses linked to falling sales and profits impacted by U.S. tariffs.
The company has found it challenging to draw in customers, especially since popular retro sneakers like the Speed Cat aren’t being sold as well as hoped. PUMA’s CEO, Arthur Hoeld, noted he has to “adjust courses” in his role, which he assumed on July 1.
“I see 2025 as a reset year for PUMA, while we envision 2026 as a transition period,” Hoeld, who was previously a sales manager at Adidas, remarked.
During a conference call with journalists, he emphasized, “As a company, we need to critically assess ourselves. We have untapped potential in certain brands, but some also need a reset and a fresh approach.”
Hoeld mentioned plans to reassess PUMA’s growth strategy and enhance the quality of its wholesale distribution, with a comprehensive strategy to be shared by the end of October.
Challenges in the Market
According to RBC analyst Piraldadania, PUMA is experiencing what could be described as an “existential identity crisis” as it seeks to maintain relevance amidst tough competition, especially with Nike’s resurgence.
The impact of U.S. tariffs is projected to cost PUMA around 80 million euros (roughly $94 million) this year, despite measures taken to ease the financial burden, such as increasing prices in the U.S. during the fourth quarter. CFO Markus Neubrand did not disclose specific price changes.
Major sportswear brands like Nike, Adidas, and PUMA depend significantly on Southeast Asian countries, particularly Vietnam, for sneakers and clothing imported to the U.S., placing them at a heightened risk of tariffs.
Neubrand noted that PUMA has expedited shipments from Asia to increase inventory levels, which has led to more frequent discounts.
Most PUMA products sold in the U.S. are manufactured in Vietnam, Cambodia, and Indonesia. The company plans to further decrease its sourcing from China, currently at 10%.
In a preliminary announcement made late Thursday, PUMA revealed that it expects annual revenue to plummet by at least 10%, a stark contrast to previous expectations of low to mid-single-digit growth.
In the second quarter, PUMA’s currency-adjusted revenue reached 1.94 billion euros, which fell short of analysts’ forecasts, with sales in North America declining by 9.1% and in Europe by 3.9%.
The company has not specified the expected annual losses but had once projected pre-tax profit and interest to be in the range of 445 million to 525 million euros.
Additionally, PUMA has reduced its capital expenditure plan for the year from a previously planned 300 million euros to 250 million euros.
