Puma's stock has experienced a significant decline following the release of its preliminary financial results for the fourth quarter of 2024. The stock price dropped approximately 23%, from €41.86 on January 22 to €32.05. Despite a 15.5% increase in revenue to €2.289 billion for the quarter, and higher-than-last-year EBIT of €109 million and net profit of €24 million, these figures fell short of market expectations.
For the entire year of 2024, Puma's revenue grew by 2.5% to €8.817 billion. However, EBIT remained flat at €622 million, and net profit decreased to €282 million from €305 million the previous year. The decline in net profit was attributed to higher net interest expenses and non-controlling interests.
Regionally, Puma saw growth in all major markets during Q4, with Greater China sales up 7.4%, other Asia-Pacific regions up 19%, Europe up 10.3%, and North America up 2.6%. In terms of product categories, footwear sales increased by 9.2%, apparel by 8.8%, and accessories by 14.5%. Wholesale sales rose by 6.9%, and direct-to-consumer sales grew by 16.1%.
Goldman Sachs downgraded Puma's target stock price from €62 to €53 while maintaining a "buy" rating, citing missed profit margins and new mid-term targets. CEO Arne Freundt acknowledged the company's strong sales growth but expressed dissatisfaction with profitability. Puma has initiated the "nextlevel" cost-cutting plan, aiming for an 8.5% EBIT margin by 2027, with a long-term goal of achieving a 10% margin.
