Shares of German sportswear giant Puma plummeted nearly 20% on Friday after the company issued a stark profit warning, stating that it now expects to post a loss this year due to weak global demand, inventory challenges, and the impending impact of US import tariffs.
The Herzogenaurach-based company said it now anticipates sales in 2025 to decline by a “low double-digit percentage” on a currency-adjusted basis, abandoning its earlier guidance that projected a low to mid-single-digit decline.
It also revised its forecast for full-year earnings before interest and tax (EBIT) from a previously expected range of EUR445 million to EUR525 million to a loss, though it did not specify the projected amount.
The news sent shares tumbling in Frankfurt trading, with the stock down close to 19% at one point on Friday, wiping out hundreds of millions of euros in market value.
‘A significant profit warning’: analysts say
In April, Puma appointed Arthur Hoeld, a former top executive at rival Adidas, to take over as chief executive to arrest the company’s declining performance.
Hoeld officially began his tenure on July 1, stepping into a business grappling with sluggish brand momentum and a sharp fall in sales, especially in key global markets.
Puma’s second-quarter results, released Thursday, revealed a net loss of EUR247 million, with total revenue down 8% year-on-year to EUR1.94 billion.
On a currency-adjusted basis, sales declined 2%.
Analysts at JP Morgan and Jefferies said the quarterly figures and the company’s revised guidance were well below market expectations.
“This is a significant profit warning,” Jefferies analysts said in a note, estimating that the updated forecast implies a roughly 20% sales contraction in the second half of the year.
US tariff blow and inventory woes compound pressure
Adding to the company’s woes are rising US tariffs on apparel and footwear imports from Asia.
Puma, like rivals Nike and Adidas, sources much of its product range from countries such as China, Vietnam, Cambodia, and Bangladesh.
The company warned that tariffs would hit its 2025 gross profit by around EUR80 million, even after supply-chain restructuring and price increases.
Despite efforts to mitigate the damage through cost-saving initiatives and price adjustments, Puma continues to struggle with high inventory levels and a loss of brand relevance, according to industry analysts.
“Puma is facing an existential identity crisis in terms of relevance in a sporting goods industry that is more competitive and at a time when the largest player Nike, is staging its comeback from Autumn/Winter ’25,” said Piral Dadhania, an analyst at RBC Capital.
JD Sports’ share price falls as retail partners also feel the heat
Puma’s profit warning had ripple effects across its retail partners.
Shares of British retailer JD Sports fell 2.2% following the announcement, reflecting broader concerns about the health of the sporting goods sector.
Market watchers are now waiting for Hoeld’s strategy to steady the business and restore investor confidence.
Analysts suggest the challenges facing Puma are both industry-wide and specific to the brand itself.
Until Puma demonstrates a clear recovery plan and improved sales momentum, pressure is likely to persist on its stock and financials.
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