Latest news with #ArneFreundt
The Independent
2 days ago
- Business
- The Independent
As Puma's sales tank, is the athleisure wear bubble about to burst?
Times are tough in trainer town, with the post-pandemic 'athleisure' and fitness boom feasted on by the sector's kingpins turning into a bust. Now Puma has torn its achilles tendon. The German giant limped into the changing room with an ugly profit warning, predicting a double-digit fall in annual sales, having previously forecast modest growth. It will also now end the year deep in the red. The company has started the process of cleaning house, ousting its CEO, Arne Freundt, in April. However, one does have to wonder whether it's going to fare any better under Arthur Hoeld, previously the head of global sales at Adidas. Although in his previous role he weathered the storm better than most, thanks the popularity of retro trainers, such as Sambas, Handball Spezials, Gazelles, etc, he wasn't directly responsible for budgets and spending. In his new role he is – and in response to Puma's second quarter dud, Hoeld has said he will cut investment to €250m (£218m) in 2025, down €50m on previous plans. Defensive cutbacks are the sort of thing shareholders approve of. Cash is king, and Puma is doing its best to conserve theirs. But for the longer term health of a brand in trouble, it's a questionable move. A corporate word salad was produced to outline other 'ongoing mitigating measures,' with plans to work more closely with retailers, sort out Puma's supply chain and fix its pricing strategy. Dare I suggest that it needs a better physio? But perhaps its Speedcat line can work the oracle. The racing shoe, which became a casual hit, has been dug out of the archive. It all looks very different from the post-pandemic athleisure and trainer boom. Working from home drove a booming market for comfy clobber, which people could wear around the house while tapping on their keyboards, and take out for a run around the park at the end of the day. As the popularity of outdoor fitness boomed, investors saw the numbers and dived in headfirst hoping for a party. It ended faster than any of them expected. Puma has now lost four-fifths of its value from its post-pandemic high; Nike has surrendered half; and Under Armour two-thirds. Canadian athleisure kingpin Lululemon bucked the trend for a while, but even its shares have lately been on the slide, while the mighty Adidas has had to trim its growth forecasts – its lofty shares are a third off their post-pandemic peak. Finding the hit design that resonates with consumers and then getting it on the right sports star has never been more important. But it's easier said than done. Fashion is fickle. So are consumers. One thing none of them can fix is Donald Trump. Their trainers and sports gear are made in places that are among the hardest hit by his tariffs; China, Vietnam, Indonesia, Thailand, Bangladesh, and so on. As was the case with many importers, the athleisure giants rushed to get in ahead of their imposition, stashing their kit in US warehouses. Trouble is, this has left them with excess inventory, forcing them into discounting to offload stock and surrendering margin in the process. These aren't products you can stores in boxes on pallets and drip feed out into the market as required; the winds of fashion move too quickly. If you end up with clothes and trainers the kids don't want to buy, you're in trouble. The tariffs and the resulting economic turmoil have also knocked consumer confidence – and people's willingness to spend on fancy new trainers and other gear with aggressive price points. However, these woes are not market wide. The athleisure kingpins are having to grapple with increased competition, too. That post-pandemic boom, and the consumer's hunt for something shiny and new and exciting, provided an opening for upstart brands such as Hoka and On. They're still on the track. The latter has quintupled revenues over the last five years, while Hoka's Californian parent Deckers Brands has doubled its sales. No business can escape can escape the impact of Trump's trade vandalism. But while acknowledging the challenges his policies pose, On, nonetheless, increased its full-year net sales outlook in May, predicting growth of 28 per cent. It is much easier to grow when you're smaller. But these businesses look fit, while their competitors' knees are covered in strapping. The established brands need to run a little faster. Cutting investment, as Puma has, won't help with that.
Mint
5 days ago
- Business
- Mint
Puma Slashes Outlook as New CEO Confronts Weak Demand, Tariffs
(Bloomberg) -- Puma SE slashed its earnings forecast for the year amid strikingly weak demand for its sports and athleisure products and growing concerns about the potential impacts of US tariffs. The German company now expects to report a loss in adjusted earnings before interest and taxes this year, according to a statement late Thursday that showed disappointing preliminary second-quarter results. That's a marked downgrade from Puma's previous target, which called for profits by that metric to reach a range of €520 million ($611 million) and €600 million. It's also far below the average analyst estimate, which foresaw a €489 million gain for the year. Puma cited weaker sales in North America, Europe and Greater China during the second quarter and said that trajectory will probably continue through the rest of year, causing high inventory levels. The company missed estimates on both sales and profit in the second quarter. It now expects currency-adjusted sales to decline by a low double-digit percentage this year. The previous forecast called for growth in the low- to mid-single-digit percentage range. The company anticipates US tariffs to hurt gross profits this year by about €80 million. Since arriving at Puma on July 1, Chief Executive Officer Arthur Hoeld is looking to reset a brand that's struggled in recent years to connect with consumers. The Adidas veteran took over after Puma's former CEO Arne Freundt left following a string of profit warnings and a disagreement with the supervisory board over the company's strategy. Puma was banking much of its performance this year on being able to sell between four and six million pairs of the thin-soled Speedcat sneaker and related models like the Ballet shoes. That push was part of Freundt's broader effort to deepen Puma's profile on higher-end sneakers and sports gear. Puma has struggled in recent years to roll out a product that's capturing the zeitgeist. Meanwhile, cross-town rival Adidas has excelled at that, especially with its retro Samba and Gazelle sneakers. Hoeld helped oversee the rollout of those shoes while at Adidas earlier this decade. More stories like this are available on
Business Mayor
09-05-2025
- Business
- Business Mayor
Puma reports decline in first-quarter profit margin
Sportswear brand Puma reported a decline in first-quarter profit margin on Thursday and flat first-quarter sales as the company cuts costs in an attempt to turn its performance around. Puma's sales of 2.076 billion euros (USD 2.35 billion) were slightly better than analysts' forecast of 2.041 billion euros, up by 0.1 per cent compared with the first quarter last year. Weaker sales to retailers in the U.S. and China drove Puma's wholesale business – its main sales driver – down by 3.6 per cent. Puma is in a period of limbo, having named former Adidas sales chief Arthur Hoeld its new CEO last month to turn performance around. Arne Freundt stepped down on April 11, and the board is leading the company until July 1 when Hoeld takes over. Puma stuck to its 2025 outlook for 'low-to mid-single-digit' sales growth, but said that excludes any impact from U.S. tariffs. READ SOURCE
Business of Fashion
08-05-2025
- Business
- Business of Fashion
Puma's Earnings Meet Estimates in Boost for CEO-less Brand
Puma SE reported a stable first quarter in a boost for the German sportswear company, which is currently operating without a chief executive officer. The sneaker brand's adjusted earnings came in at €76 million ($86 million) before interest and taxes, according to a statement Thursday. That's down from a year ago but slightly ahead of analyst estimates. Puma also maintained its 2025 earnings targets while acknowledging that the outlook ignores the potential impacts of President Donald Trump's tariffs because there's so much uncertainty. Shares rose as much as 7.8 percent in Frankfurt trading. The stock is down more than 40 percent so far this year. The steady performance amounts to a bright spot for the German brand, which in April parted ways with its former CEO Arne Freundt following a disagreement with the supervisory board over the company's strategy. Puma is now waiting for Adidas veteran Arthur Hoeld's arrival as boss in July. It's a challenging time to be without a leader, with the sneaker industry's exposure to Asia manufacturing putting it in the crosshairs of the US trade war. But Puma appears to be gaining some momentum with its retro Speedcat sneaker, which is key to the company's efforts to raise prices for its more fashionable footwear. The brand still plans to sell between four and six million pairs of the thin-soled Speedcat and related models like the Ballet shoes this year, chief financial officer Markus Neubrand said on a call with reporters. Demand has been particularly strong for those in Asia and North America, while it's been disappointing at some European retailers, he said. While Puma only gets about 20 percent of its sales in the US, the brand has nonetheless seen resilient demand in the country despite concerns about recession and inflation. 'Traffic was under pressure mostly in February, which was the worst month, and since then we've seen an improvement to the traffic development in the US,' Neubrand said. While many investors will welcome the company's decent start to the fiscal year, they'll probably want to see how exactly Hoeld will adjust the strategy before changing their opinion about Puma, Piral Dadhania, an analyst at RBC Capital Markets, said in a note. Puma performed slightly better than expected in the Europe, Middle East and Africa region while its performance suffered in North America and China, Dadhania noted. In March, Puma disappointed investors with a gloomy trading update based on trade tariffs, currency swings and escalating geopolitical tensions. It also said adjusted earnings before interest and taxes would probably fall this year to between €520 million and €600 million, while currency-adjusted sales would only grow in the low- to mid-single-digit range. The outlook raised doubts about whether Puma can achieve its target of an 8.5 percent EBIT margin by 2027, a goal it already pushed back by two years in January. The brand has struggled to build on the momentum it generated during the nearly decade-long tenure of Bjorn Gulden, who left to become Adidas's CEO in 2023. Freundt sought to deepen Puma's profile on higher-end sneakers and sports gear but never managed to roll out a product that captured the zeitgeist. While some analysts applauded the decision to bring in Hoeld as the new CEO, they cautioned that it will take months for Puma to change its strategy and even longer for Hoeld to bring new products to market. By Tim Loh Learn more: Puma Warns Tariffs, Geopolitical Tensions in 2025 Forecast The German sportswear brand expects currency-adjusted sales to grow in the low- to mid-single-digit range, it said in a statement.
Wall Street Journal
08-05-2025
- Business
- Wall Street Journal
Puma Confirms Outlook in Challenging Environment Given U.S. Tariffs
Puma reiterated its guidance for the year amid a challenging landscape marked by the potential impact of U.S. tariffs. Photo: abdul saboor/Reuters Puma reiterated its guidance for the year amid a challenging landscape marked by the potential impact of President Trump's tariffs and shortly after the group parted ways with former Chief Executive Arne Freundt . The German sporting-goods company said Thursday that it continues to anticipate an increase in sales in the low- to mid-single-digit percentage range on a currency-adjusted basis in 2025.
