Puma shares slid 18 p.c on Thursday after the German sportswear model reported decrease than anticipated fourth-quarter gross sales and a decline in annual revenue, elevating questions on its skill to compete towards larger rivals Adidas and Nike.
The weak outcomes late on Wednesday got here after Adidas reported sturdy gross sales and profitability, highlighting the work Puma nonetheless faces to spice up its model and take an even bigger slice of the $400 billion world sportswear market.
Puma shares had been down 18 p.c at €34.4 on the right track for his or her worst day ever and hitting their lowest degree since March 2018.
Puma has been advertising new footwear such because the motor racing-inspired Speedcat because it tries to launch new tendencies in a market dominated by Adidas’ retro Samba soccer trainers, however JP Morgan analysts stated gross sales tendencies for the Speedcat have been weaker than anticipated.
Newer, fast-growing manufacturers like On Working and Hoka have shaken up the sportswear business, eroding the dominance of Nike and creating extra competitors for shelf area at high sporting items retailers.
Puma’s fourth-quarter gross sales grew 9.8 p.c in currency-adjusted phrases, towards the 12% development anticipated by analysts. Internet revenue final yr fell to €282 million ($293 million) from €305 million, partly attributable to greater curiosity funds on its debt.
The corporate didn’t present any particulars on Wednesday about what led to its weaker than anticipated gross sales. CEO Arne Freundt had stated in November he was assured about demand heading into the year-end purchasing season.
Puma launched a cost-cutting programme aiming to succeed in a margin on earnings earlier than curiosity and taxes of 8.5 p.c by 2027, up from 7.1 p.c in 2024.
Barclays analysts stated there was a danger the cost-cutting drive would take administration’s focus away from growing gross sales.
“At this stage, we see extra questions than solutions in regards to the path that Puma will take within the subsequent three years to 2027,” they stated in a word.
Puma is scheduled to supply extra detailed steerage when it publishes its full-year report on March 12.
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