Puma's quarterly earnings report for the first quarter of 2025 has revealed a significant decline in profits, yet the company remains optimistic about its annual forecast. On Thursday, May 8, 2025, Puma shares rose by around four percent following the announcement of the quarterly figures, which investors interpreted as a positive sign despite the underlying challenges.
The sportswear manufacturer reported a net profit of only 0.5 million euros, a sharp drop from 87.3 million euros in the same period last year. This decline resulted in earnings per share falling to zero euros, down from 0.58 euros a year earlier. The operating result, or EBIT, plummeted by 63.7 percent to 57.7 million euros, with the EBIT margin decreasing from 7.6 percent to 2.8 percent. When adjusted for special effects, EBIT was reported at 75.7 million euros, reflecting a decrease of 52.4 percent, and the adjusted margin stood at 3.6 percent.
Operating expenses also saw an increase, rising by 7.1 percent to 905 million euros, while total sales decreased by 1.3 percent to 2.08 billion euros. However, when adjusted for currency fluctuations, there was a marginal increase of 0.1 percent. Regionally, the performance was mixed: the EMEA region saw a sales increase of 5.1 percent, while North America experienced a decline. Latin America, on the other hand, recorded double-digit growth, but revenues in the Asia/Pacific region fell by 4.7 percent, largely attributed to ongoing weaknesses in the Chinese market.
Despite these disappointing figures, Puma has confirmed its annual forecast, anticipating a currency-adjusted sales growth in the low to mid-single-digit percentage range for the current financial year. The company also expects adjusted EBIT to fall between 520 and 600 million euros, compared to 622 million euros in the previous year. This outlook notably does not account for the potential impacts of newly announced US tariffs, which were disclosed after the original forecast was made on March 11, 2025.
Markus Neubrand, Puma's Chief Financial Officer, emphasized the company’s focus on manageable factors in a challenging environment. "Our outlook for 2025 remains unchanged. Given the uncertainty surrounding the impact of the US tariffs, we cannot quantify the potential consequences at this time," he stated. To adapt to market changes, Puma has already reduced its imports from China and plans to cut around 500 jobs globally by the end of the second quarter of 2025.
Analysts had anticipated even weaker results, which indicates that expectations play a significant role in market reactions. The consensus estimates had been lowered considerably, allowing Puma to present results that were slightly better than expectations, despite the overall decline in performance.
The company reported that while wholesale sales decreased by 3.6 percent, the Direct-to-Consumer segment grew by 12 percent to 546.5 million euros, driven primarily by a robust e-commerce performance that saw a 17.3 percent increase. The footwear category also performed well, with a 2.4 percent rise in sales, largely fueled by strong demand for running, basketball, and sport-style models. However, textile sales fell by 1.5 percent, and accessories dropped significantly by 5.7 percent, with the golf sector notably impacting this decline.
Puma's stock showed resilience despite the disappointing earnings report, rising by 6.93 percent to 24.99 euros on the day of the announcement. This uptick reflects investor confidence in the company’s long-term strategy, even as it grapples with immediate financial pressures.
Looking ahead, Puma is continuing its 'nextlevel' efficiency program, which entails one-off costs of up to 75 million euros, but is expected to yield a positive EBIT effect of up to 100 million euros in the future. The program is part of the company’s broader strategy to enhance operational efficiency amidst a challenging retail environment.
In summary, while Puma's first-quarter results indicate significant challenges, particularly in profitability and regional performance, the company's commitment to its annual forecast and ongoing operational adjustments highlight its resilience. Investors and analysts alike will be watching closely as Puma navigates these turbulent waters in the coming months.
