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Puma, facing a 50% stock decline this year, is implementing a turnaround plan under new CEO Arthur Hoeld. The strategy involves cutting 900 corporate jobs, reducing reliance on discounters by focusing on direct sales, and streamlining its product range. Puma aims to reduce overexposure, discounting, and improve marketing. Sales fell 15.3% in the third quarter. The company was slow to react to the popularity of Adidas sneakers and Puma’s Speedcat model sales targets have not been met. Puma anticipates a loss in 2025, a transition year in 2026, and aims for growth by 2027. There are no plans to sell off parts of the business.
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Puma’s share price has halved since the start of this year as it loses ground to rivals in an increasingly competitive sportswear market. The stock was down 2.5% at 1200 GMT after third-quarter results showed sales fell 15.3% to 1.96 billion euros ($2.29 billion) due to increased discounting.
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“Puma has become too commercial, overexposed in the wrong channels, with too many discounts,” he said in a press conference at its headquarters in Herzogenaurach, Germany.
“I am sure we will get the cat on track again,” he said, referring to the company’s panther logo.
PUMA SNEAKERS NOT TRENDY ENOUGH
Adidas has seen its retro-style Samba and Gazelle sneakers fly off the shelves while Puma was late to the party with its Palermo sneaker, and its low-profile Formula 1-inspired Speedcat sneakers haven’t met sales targets.
“We have been waiting, hearing a lot about the potential success of the Speedcats, and they did not deliver, so they need to improve their execution,” HSBC analyst Anne-Laure Bismuth told Reuters.
Speedcat sales growth in Europe and North America remained below expectations in the third quarter, Puma said on Thursday.
INVESTORS MAY HAVE TO WAIT FOR TURNAROUND PAYOFF
Puma said it aims to return to growth in 2027 after a “transition year” in 2026. It expects a loss for 2025.
Puma is overhauling its wholesale strategy to sell fewer products to cut-price retailers in the U.S. and increase direct sales through its website and stores.
It will also buy fewer products from suppliers, chief financial officer Markus Neubrand said, and cut its range with fewer new releases.
CEO HOELD: NO PLANS TO SELL BITS OF BUSINESS
Hoeld rejected reports Puma could dispose of some segments of the business, saying there was no plan to sell any of it.
It has taken back unsold stock from retailers, driving its inventories up 17.3% to 2.12 billion euros in the quarter.
That will likely have to be sold through its outlet stores, said HSBC’s Bismuth. Puma expects inventories to return to normal levels only by the end of 2026.
($1 = 0.8575 euros)
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