Puma Shares Plunge 20% as Weak Profit Shakes Confidence

The logo of German sports goods firm Puma is seen at the entrance of one of its stores in Vienna, Austria, March 18, 2016. REUTERS/Leonhard Foeger/File Photo
The logo of German sports goods firm Puma is seen at the entrance of one of its stores in Vienna, Austria, March 18, 2016. REUTERS/Leonhard Foeger/File Photo
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Puma Shares Plunge 20% as Weak Profit Shakes Confidence

The logo of German sports goods firm Puma is seen at the entrance of one of its stores in Vienna, Austria, March 18, 2016. REUTERS/Leonhard Foeger/File Photo
The logo of German sports goods firm Puma is seen at the entrance of one of its stores in Vienna, Austria, March 18, 2016. REUTERS/Leonhard Foeger/File Photo

Puma lost a fifth of its market value on Thursday after the German sportswear brand reported lower than expected fourth-quarter sales and a drop in annual profit, raising questions about its ability to compete with bigger rivals Adidas and Nike.

The poor results late on Wednesday came after Adidas reported strong sales and profitability, highlighting the work Puma still faces to boost its brand and take a bigger slice of the $400 billion global sportswear market.

Puma shares were down 20% at 33.5 euros as of 1330 GMT, on course for their worst day ever and hitting their lowest level since March 2018.

Puma has been relaunching shoes such as the 1999 motor racing-inspired "Speedcat" as it tries to muscle into a market dominated by Adidas' retro Samba soccer sneakers, but JPMorgan analysts said sales trends for the Speedcat have been weaker than expected so far.

Newer, fast-growing brands such as On Running and Hoka have shaken up the sportswear industry, eroding the dominance of Nike , which has seen slowing sales, and creating more competition for shelf space at top sporting goods retailers.

"This will make investors question what the competitive advantage of Puma is," said Deutsche Bank Research analyst Adam Cochrane.

"If Puma is not really taking market share, at a time when its biggest competitor (Nike) is weak, is the customer not accepting the brand premiumisation it is trying to put through?"

Puma has increased spending on marketing to boost its brand perception, and the Speedcat is priced at 109.95 euros ($114.44) on its website, on par with Adidas' Samba – whereas Puma shoes have traditionally been cheaper than Adidas and Nike.

Puma has said it aims to sell between 4 million and 6 million pairs of the Speedcat in 2025.

Puma's fourth-quarter sales rose 9.8% in currency-adjusted terms, below the 12% growth expected by analysts. Net profit last year fell to 282 million euros ($293 million) from 305 million, in part due to higher interest payments on its debt.

The company did not explain what led to its weaker than expected sales. CEO Arne Freundt had said in November he was confident about demand heading into the year-end shopping season, Reuters reported.

The strength of the US dollar poses a problem for Puma, which pays its Asian suppliers in dollars but makes a big share of revenues in euros.

On the back of the weak profit, Puma launched a cost-cutting programme aiming to reach an earnings before interest and tax (EBIT) margin of 8.5% by 2027, up from 7.1% in 2024.

"While we achieved solid sales growth in 2024 and made meaningful progress on our strategic initiatives, we are not satisfied with our profitability," Freundt said in a statement.

Puma said it would continue to make "strategic investments" in its brand to boost growth.

But Barclays analysts said there was a risk the cost-cutting drive would take management's focus away from increasing sales.

"At this stage, we see more questions than answers about the path that Puma will take in the next three years to 2027," they said in a note.

Puma is scheduled to provide more detailed guidance when it publishes its full-year report on March 12.



Fashion Commission Celebrates Winners of 'Traditional Handcrafts Revival in Saudi Fashion' Competition

The competition reinforces the Kingdom's cultural identity on the global fashion stage and highlights the potential of Saudi craftsmanship to inspire innovation in modern design. (SPA)
The competition reinforces the Kingdom's cultural identity on the global fashion stage and highlights the potential of Saudi craftsmanship to inspire innovation in modern design. (SPA)
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Fashion Commission Celebrates Winners of 'Traditional Handcrafts Revival in Saudi Fashion' Competition

The competition reinforces the Kingdom's cultural identity on the global fashion stage and highlights the potential of Saudi craftsmanship to inspire innovation in modern design. (SPA)
The competition reinforces the Kingdom's cultural identity on the global fashion stage and highlights the potential of Saudi craftsmanship to inspire innovation in modern design. (SPA)

The Saudi Fashion Commission concluded its "Traditional Handcrafts Revival in Saudi Fashion" initiative with a special awards ceremony in Riyadh on Sunday.

The initiative aligns with the Ministry of Culture’s Year of Handicrafts 2025 vision to promote traditional handcrafts by highlighting Saudi traditional attire, celebrating the Kingdom's rich cultural heritage, and supporting local creative talents.

The competition aimed to integrate traditional handcraft techniques into contemporary fashion, creating a bridge between the past and present. Participants engaged in specialized workshops led by fashion experts, exploring ways to merge traditional craftsmanship with modern design principles.

The program provided a holistic experience, teaching not only the techniques of handcrafts but also deepening participants' understanding of their historical and cultural significance.

A total of 235 applicants competed in the initiative, with 25 finalists selected for the final stage. The winning designs were showcased during the Saudi Cup 2025, coinciding with Founding Day celebrations. A distinguished panel of judges, comprising leading figures in fashion, arts, and heritage, selected the top ten designs.

The competition reinforces the Kingdom's cultural identity on the global fashion stage and highlights the potential of Saudi craftsmanship to inspire innovation in modern design.