Puma shares fall 18% after losing quarterly sales and profits, according to Reuters

Written by Helen Reid

(Reuters) – Puma (OTC:) Shares fell 18% on Thursday after the German sportswear brand reported lower-than-expected fourth-quarter sales and a drop in annual profits, raising questions about its ability to compete against larger rivals Adidas (OTC:) and Nike (New York Stock Exchange:).

The weak results came late Wednesday after Adidas reported strong sales and profitability, highlighting the work Puma still faces to bolster its brand and capture a larger slice of the $400 billion global sportswear market.

Puma shares fell 18 percent to 34.4 euros by 0920 GMT, heading towards its worst day ever, reaching its lowest level since March 2018.

Puma has been marketing new shoes such as the speedcat, inspired by motor racing, as part of its attempt to launch new trends in a market dominated by Adidas’s old Samba soccer cleat, but JP Morgan analysts said Speedcat sales trends were weaker than expected.

Newer, fast-growing brands like On Running and Hoka have shaken up the athletic apparel industry, eroding Nike’s dominance and creating more competition for shelf space at major sporting goods retailers.

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

The company did not provide any details on Wednesday about what led to its weaker than expected sales. CEO Arne Freundt said in November that he was confident about demand heading into the end-of-year shopping season.

Puma has launched a cost-cutting program aiming to reach an earnings before interest and tax (EBIT) margin of 8.5% by 2027, up from 7.1% in 2024.

Barclays (LON:) Analysts said there was a risk that the cost-cutting drive could shift management’s focus away from increasing sales.

“At this point, we see more questions than answers about the path Puma will take in the next three years through 2027,” they said in a note.

Puma is set to provide more detailed guidance when it publishes its full annual report on March 12.

($1 = 0.9610 euros) (This story has been reworded to include the word “shares” rather than “sales” in paragraph 3)