PUMA SE Earnings Call: Mixed Results and Strategic Outlook

PUMA SE NPV ((DE:PUM)) has held its Q1 earnings call. Read on for the main highlights of the call.

PUMA SE’s recent earnings call painted a mixed picture for investors and stakeholders. While the company showcased robust growth in its Direct to Consumer (DTC) segment and celebrated successful brand campaigns, it also faced challenges with declining wholesale sales, a drop in EBIT and net income, and issues surrounding inventory and working capital. Despite these hurdles, PUMA remains committed to its 2025 outlook, even as uncertainties loom regarding US tariffs.

Direct to Consumer (DTC) Growth

PUMA’s DTC business emerged as a bright spot, recording a 12% growth, with e-commerce leading the charge at 17.3%. This growth was consistent across all regions, highlighting the company’s strategic focus on strengthening its direct sales channels and enhancing customer engagement through digital platforms.

Successful Brand Campaign Launch

The launch of ‘Go Wild’, PUMA’s largest brand campaign to date, has been a significant success. Focusing on running, the campaign has garnered millions of views and achieved strong global visibility, reinforcing PUMA’s brand presence and appeal in the competitive sportswear market.

Product Innovation

PUMA’s commitment to product innovation was evident with the introduction of new offerings like the PUMA Deviate NITRO Elite 3 and PUMA FUTURE 8. These products have contributed positively to the brand’s momentum, attracting consumer interest and driving sales.

EMEA and Emerging Markets Growth

Sales in the EMEA region grew by 5.1%, while emerging markets such as EEMEA and Latin America experienced double-digit growth rates. This performance underscores PUMA’s ability to capitalize on opportunities in diverse geographic markets, despite global economic uncertainties.

Wholesale Sales Decline

The wholesale segment faced challenges, with a 4% decline, particularly in the US and China. This downturn reflects broader market trends and highlights the need for strategic adjustments to bolster wholesale operations.

Decreased EBIT and Net Income

PUMA reported a significant decrease in adjusted EBIT by 52% to EUR 76 million, and net income dropped to EUR 0.5 million. These declines were attributed to currency headwinds and the absence of last year’s positive inventory valuation effects.

Gross Profit Margin Decrease

The gross profit margin decreased by 60 basis points to 47%, influenced by adverse currency movements and the lack of favorable inventory valuation effects from the previous year.

Inventory and Working Capital Increase

Inventory levels saw a 21% increase on a currency-adjusted basis, while working capital rose by 13%. These increases were partly due to accelerated deliveries to the US in anticipation of new tariffs, posing challenges in managing operational efficiency.

Forward-Looking Guidance

Looking ahead, PUMA maintained its full-year 2025 outlook, anticipating low to mid-single-digit currency-adjusted sales growth and adjusted EBIT between EUR 520 million and EUR 600 million, excluding potential impacts from new US tariffs. The company is also implementing a next-level cost efficiency program, aiming for an EBIT contribution of up to EUR 100 million in 2025.

In conclusion, PUMA SE’s earnings call highlighted a blend of achievements and challenges. While the company celebrates growth in its DTC segment and successful brand initiatives, it must navigate declines in wholesale sales and financial metrics. Nonetheless, PUMA’s commitment to its 2025 outlook and strategic initiatives offers a roadmap for potential recovery and growth.