Puma plunges 16% as Q2 loss triggers profit warning and outlook collapse

Investing.com -- Shares of Puma (ETR:PUMG) sank 16% on Friday after it sharply lowered its full-year 2025 forecast after posting a second-quarter loss and missing internal and market expectations on both revenue and earnings. 

The German footwear and apparel company cited weaker sales across all regions, margin pressure, rising inventories, and the impact of U.S. tariffs.

Second-quarter currency-adjusted sales fell 2% to €1.94 billion, while reported sales declined 8.3%. 

All major markets, North America, Europe, and Greater China, posted declines.

By product category, Footwear grew 5% currency-adjusted, while Apparel fell 11% and Accessories dropped 6%, missing consensus expectations.

Direct-to-consumer revenue rose 9% currency-adjusted, while wholesale sales declined 6%. 

Gross margin decreased 70 basis points to 46.1%, pressured by promotional activity and unfavorable currency effects. Sourcing, freight, and a more profitable channel mix partially offset the decline.

Adjusted EBIT dropped to a deficit of €13.2 million, compared with a prior-year profit.

Including one-time costs of €84.6 million, related to the “nextlevel” cost efficiency program and goodwill impairments, reported EBIT stood at a loss of €98 million. Net loss for the quarter reached €247million.

Inventories rose 10% year over year to €2.15 billion. PUMA said it will continue to reduce inventory levels in the second half of the year.

The company also reduced its capital expenditure forecast for 2025 to €250 million, down from €300 million.

PUMA now expects currency-adjusted full-year sales to decline in the low double-digit percentage range, compared to its previous guidance for a low- to mid-single-digit increase.

Full-year EBIT is now forecast to be negative. The prior EBIT range was €445 million to €525 million.

The revised outlook includes an estimated €80 million gross profit impact from U.S. tariffs, as well as currency effects and further one-time charges related to cost alignment.

According to RBC Capital Markets, second-quarter performance missed consensus estimates, with all geographic regions reporting revenue declines. 

While Footwear exceeded expectations, weakness in Apparel and Accessories weighed on overall results. 

The brokerage also noted elevated inventory levels and projected increased clearance activity in the coming months.

RBC said PUMA is undergoing a reset under new CEO Arthur Hoeld, as it navigates a more competitive market environment. 

It added that Nike (NYSE:NKE) is preparing for a brand relaunch in Autumn/Winter 2025, further intensifying industry pressure.