Germany's Puma sees sales growth, stronger margins in FY24

For fiscal 2025 (FY25), the company anticipates that geopolitical tensions and macroeconomic challenges will continue, especially trade disputes and currency volatility, which is expected to weigh on consumer sentiment and demand in key markets. Against this backdrop, Puma expects currency adjusted sales to grow in the low- to mid-single-digit percentage range in FY25.

PUMA launched the Nextlevel efficiency programme in February 2025 to enhance profitability, targeting an 8.5 per cent EBIT margin by 2027. The programme focuses on improving gross margin through reduced product complexity and sourcing efficiencies, optimising OPEX via cost management and resource allocation, and increasing free cash flow by refining capital and working capital strategies. Freed-up resources will be reinvested into brand and product, strengthening company’s competitiveness.

The Nextlevel cost efficiency programme is expected to incur one-time costs of up to €75 million in 2025, which are related to the closure of unprofitable owned and operated retail stores, restructuring expenses and other one-time non-operating costs. In return, the company expects to generate additional EBIT of up to €100 million in FY25. The net contribution from the Nextlevel cost efficiency programme to EBIT in FY25 is projected to be up to €25 million, Puma said in a press statement.

The Bavarian company forecasts an adjusted EBIT of €520–600 million for FY25, excluding one-time costs. This reflects continued investments in marketing, retail, and infrastructure, along with the net impact of the Nextlevel programme.

Puma plans to continue investing in its retail store network and e-commerce business, along with warehouse and digital infrastructure, to enable its long-term growth objectives and therefore anticipate capital expenditures (capex) of around €300 million in 2025.

“Our outlook for 2025 is below the expectations we set a year ago, both in terms of top and bottom lines. We are fully aware of the root causes of our challenges and are addressing them with full focus and rigor,” said Arne Freundt, chief executive officer (CEO) of Puma. “In this volatile environment, we remain committed to doing what is right for the company in the long term: elevating the brand, creating innovative and aspirational product franchises, being the best service partner to our retailers and investing in our infrastructure to achieve cost efficiencies over time.”

“While 2025 will be a challenging year, I am particularly excited to see the impact of our new brand campaign, the launch of our latest running innovations and the build-up of further traction with our exciting products offers in the low-profile category,” added Freundt.

Performance in FY24

Puma’s sales grew by 4.4 per cent in FY24 to reach €8.82 billion (~$9.61 billion), with all regions, product divisions, and distribution channels contributing. The Americas led growth at 7.0 per cent, followed by Asia/Pacific at 3.8 per cent and Europe, Middle East, and Africa (EMEA) at 2.1 per cent.

Wholesale sales rose 0.4 per cent, while direct-to-consumer (DTC) surged 16.6 per cent, driven by brand demand and store openings. Footwear sales increased by 5.4 per cent, apparel by 3.7 per cent, and accessories by 2.0 per cent.

The gross profit margin improved to 47.4 per cent in this fiscal, while operating expenses rose 5.2 per cent due to DTC growth and infrastructure investments. EBIT remained stable at €622.0 million (~$678 million), with a 7.1 per cent margin. However, net income fell 7.6 per cent to €281.6 million due to higher financial expenses and tax rates, bringing earnings per share down to €1.89.

In 2024, major sports events supported progress in brand elevation, which includes establishing a strong brand DNA, and boosting performance credibility. The ‘See the Game Like We Do’ campaign improved global brand awareness, particularly in the US. Thus, it plans to further increase media investment in its 2025 campaign to strengthen its refined brand identity and market position.

Puma continued enhancing distribution quality in 2024, aligning with its brand elevation strategy. The company strengthened relationships with retail partners, gaining market share. Strategic accounts played a key role in boosting brand credibility and consumer engagement. In owned retail, flagship stores, such as in Las Vegas, reinforced brand presence, while investments in e-commerce supported the consumer journey.

In the fourth quarter (Q4) of FY24, Puma's sales rose 9.8 per cent to €2.29 billion (~$2.5 billion), with growth across all regions, product divisions, and distribution channels. Currency impact shifted from a headwind to a tailwind, contributing to the improvement.

Sustainability

Puma's ‘Vision 2030’ sustainability goals focus on climate, circularity, and human rights, building on significant progress made in recent years. The company’s leadership in sustainability has been recognised by prestigious awards from organisations such as CDP, the Material Change Index, and the Financial Times for Good Index. Additionally, Puma successfully scaled up its Re:Fibre recycling innovation, producing millions of replica football jerseys using recycled materials, the statement added.

Fibre2Fashion News Desk (SG)