Struggles mount for Puma as stock prices plummet due to profit warning signs, sparking an identity dilemma.
Puma, the global sportswear giant, is bracing for an annual loss in 2025, primarily due to weaker-than-expected sales and the negative impact of U.S. tariffs. These tariffs are estimated to reduce Puma's gross profit by around €80 million ($94 million).
The company has been grappling with "muted brand momentum," with re-released retro sneakers underperforming and overall consumer demand softening. This has led to a contraction in the gross profit margin and a significant increase in inventory levels, indicating challenges in moving stock efficiently. As a result, sales have declined by approximately 4.8%, and substantial one-time charges have led to a net loss of approximately €247 million in the second quarter alone.
Arthur Hoeld, who took over as CEO on July 1, 2025, is tasked with turning around Puma’s performance. While specific detailed measures he plans to implement are not outlined explicitly, the company is focusing on actively managing and reducing elevated inventory levels, strategically responding to tariff challenges, and revitalizing brand momentum and product appeal.
Puma's capital expenditure plans for the year have been cut from 300 million euros to 250 million euros. The company aims to reduce its sourcing from China to the US further, currently at 10%. Puma frontloaded shipments of goods from Asia ahead of US tariff deadlines, driving inventory levels up and contributing to more discounting.
Markus Neubrand, Puma's CFO, declined to disclose the extent of the US price hikes in the fourth quarter. Hoeld will provide a broader roadmap on his strategy for Puma by the end of October. The company's annual sales are expected to decline by at least 10%, a downgrade from previous forecasts of low to mid-single-digit growth.
In North America, sales dropped by 9.1% in the second quarter, and in Europe, they decreased by 3.9%. Most Puma products sold in the United States are made in Vietnam, Cambodia, and Indonesia. RBC analyst Piral Dadhania stated that Puma is facing an existential identity crisis in terms of relevance in the sporting goods industry.
Despite these challenges, the new leadership at Puma remains optimistic. Hoeld has identified the need for a "course-correction" within the company and is expected to prioritize operational efficiency, cost controls, inventory optimization, and marketing initiatives to rebuild consumer interest and stabilize profitability going forward.
[1] Reuters. (2025). Puma to report Q2 loss as tariff-hit sales fall sharply. Retrieved from https://www.reuters.com/article/us-puma-results-idUSKCN25F290
[2] CNBC. (2025). Puma's new CEO plans to review growth strategy and cut costs. Retrieved from https://www.cnbc.com/2025/07/01/puma-new-ceo-plans-to-review-growth-strategy-and-cut-costs.html
[3] Financial Times. (2025). Puma chief executive vows to reverse fortunes of German sportswear brand. Retrieved from https://www.ft.com/content/361325aa-3e1e-4c71-879b-b96748c78238
The sports industry, including Puma, is experiencing financial turbulence due to a combination of factors such as weak sales, tariffs, and inventory issues. The negative impact of U.S. tariffs on Puma is estimated to reduce its gross profit by €80 million ($94 million), contributing to a significant net loss.
In an effort to turn Puma's performance around, the new CEO, Arthur Hoeld, plans to focus on operational efficiency, cost controls, inventory optimization, and marketing initiatives to rebuild consumer interest and stabilize profitability in the business sector, addressing the existential identity crisis faced by Puma in the sporting goods industry.
