Shares of Puma SE (ETR:PUMG) (OTC:PMMAF) tumbled more than 24% on Wednesday after the German sportswear brand issued a profit warning, slashing its full-year 2025 guidance well below market expectations.
The company cited weakness in key markets, particularly the U.S. and China, for the disappointing outlook.
Puma now expects full-year 2025 constant-currency revenue growth in the low-to-mid single digits, a significant downgrade from the 6.7% growth forecasted by consensus estimates.
Adjusted EBIT projections have been revised to a range of €520 million to €600 million, a sharp decline from the €700 million anticipated by analysts.
The company also warned of a particularly weak first quarter, with sales expected to decline in the low single digits, compared to a previously expected growth of 6.9%. Additionally, first-quarter adjusted EBIT is now forecasted at €70 million, well below the consensus estimate of €189 million.
The Herzogenaurach-headquartered company ’s revised EBIT range of €445 million to €525 million—after accounting for one-time costs from its cost efficiency program—is 29% below consensus.
The company cited "ongoing geopolitical tensions and economic challenges in 2025" as key factors behind its cautious outlook. While investor expectations had recently been lowered, Barclays sees the guidance as falling below even the most conservative estimates.
Barclays and Morgan Stanley analysts both flagged uncertainty over whether Puma’s outlook reflects a more cautious approach following past guidance misses or if it signals deeper macroeconomic difficulties, weaker trading momentum, and risks of order book softness.
Retailer feedback suggests Puma’s sportstyle business is losing momentum, with potential order cancellations if the Speedcat rollout underperforms in Q2.
Jefferies analysts confirmed EMEA as a regional outperformer in Q4, while the Americas remained weak.
Puma’s results confirmed group FY sales, EBIT, and net income figures of €8.82 billion, €622 million, and €282 million, respectively—figures pre-released in January.
Q4 revenue growth ex-FX stood at 14.6% in EMEA, 6.5% in the Americas, and 9.5% in APAC. Gross margin for FY24 improved to 47.4%, but EBIT margin declined slightly to 7.1%.
Despite these figures, inventory levels remain elevated, with closing inventory up 11.6% year-over-year to €2.01 billion, compared to a sales increase of just 2.5%. Puma also proposed a dividend per share of €0.61, falling short of the consensus estimate of €0.86, and reiterated its long-term EBIT margin target of 8.5% by 2027.
The downgrade in guidance has led Morgan Stanley to lower its price target on Puma’s stock to €27 from €37, citing concerns over near-term sales performance and broader challenges in key global markets.
Analysts also flagged inventory valuation effects from 2024, higher operating expenses, and shifting marketing spend as additional headwinds to profitability.
