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Puma has launched a cost-cutting programme after missing its profit target for 2024, a day after rival Adidas exceeded expectations, highlighting the diverging fortunes of Germany’s two highest profile sportswear brands.
Puma’s net income for 2024 fell slightly to €282mn, down from €305mn the previous year and below analysts’ expectations, according to preliminary results published on Wednesday evening.
Shares in the group fell 14 per cent in early trading on Thursday.
It suffered the drop in profits despite full-year sales growing to €8.8bn in 2024, a 4.4 per cent increase after stripping out the effect of exchange rate changes.
The company blamed the decline in profits on higher interest expenses and the increased sales through a US joint venture, whose profits are only partially consolidated.
While this increased revenue, it weighed on Puma’s profit margin. The company is aiming to boost its margin through cost cutting, which it said would include reallocating staff to “strategic growth areas” such as marketing, while keeping the total headcount “stable”.
“While we achieved solid sales growth in 2024 . . . we are not satisfied with our profitability,” said chief executive Arne Freundt.
Freundt, who took over in 2022, said Puma expected stronger growth in 2025 than 2024, adding that there would be a “heightened focus” on translating higher revenues into increased profitability.
The results are a contrast with Puma’s larger rival Adidas, which is now run by Puma’s previous chief executive Bjørn Gulden. Adidas this week reported a 12 per cent increase in revenue to €23.7bn for 2024, driven by strong demand for classic sneakers such as the Samba and Gazelle.
While Adidas shares have risen more than 50 per cent over the past year, Puma’s shares have remained largely unchanged.
Analysts expect Puma and Adidas’ US rival Nike to report a revenue decline for its current fiscal year, which ends in May.
On Wednesday, Puma said its sales in the final quarter of 2024 had increased 9.8 per cent compared with the same period last year, with accessories and direct-to-consumer sales outpacing the traditional sports shoes and textiles businesses.
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