Puma shares fall 18 percent after quarterly sales and profit, Reuters
By Helen Reid
(Reuters) – Puma ( OTC: ) shares slid 18% on Thursday after the German sportswear brand reported lower-than-expected fourth-quarter sales and a drop in annual profit, raising questions about its ability to compete with its biggest rival Adidas ( OTC: ). Nike (NYSE:
The weak results came late Wednesday after Adidas reported strong sales and profitability, underscoring the work Puma still has to do to grow its brand and take a bigger slice of the $400 billion global sportswear market.
Puma shares were down 18 percent at 34.4 euros by 0920 GMT, their all-time high and their lowest since March 2018.
Puma has been trying to launch new trends in a market dominated by Adidas’ retro Samba football trainers, launching new shoes such as the motor racing Speedcat, but JP Morgan analysts say the Spedicat’s sales trend is weaker than expected.
New, fast-growing brands like On Running and Hoka have shaken up the sportswear industry, eroding Nike’s dominance and creating more competition for shelf space at major sporting goods retailers.
Puma’s fourth-quarter sales were up 9.8% adjusted for cash, compared with the 12% growth expected by analysts. Last year’s net profit fell from 305 million to 282 million euros ($293 million), partly due to higher interest payments on its debt.
The company did not provide any information on Wednesday, which led to weaker-than-expected sales. CEO Arne Freundt said in November that he was confident there would be interest during the year-end trading season.
Puma has embarked on a cost-cutting program aiming to reach an 8.5% EBIT margin by 2024, up from 7.1%.
Barclay ( LON: ) analysts said the cost-cutting drive could take management’s focus away from boosting sales.
“At this stage, we see more questions than answers about the path Puma will take over the next three years to 2027,” they said in their note.
Puma is scheduled to provide more detailed guidance when it releases its full-year report on March 12.
($1 = 0.9610 EUR) (This story has been amended to say ‘sales’ rather than ‘stock’ in paragraph 3)