Companies

Puma profits dip in the first quarter

May 13, 2025 Germany

The sportswear company reported a subdued performance in the first quarter, with the adjusted operating profit falling by more than 50% year-on-year due to lower gross profit margins and rising operating expenses

“In the first quarter and despite a challenging environment, Puma achieved sales on last year's level in constant currencies. Our Direct-to-Consumer business, driven by e-commerce, grew by 12%, while our wholesale business declined by 4% - primarily because of the U.S. and China. Our adjusted operating profit came in broadly in line with our expectations”, commented Markus Neubrand, Chief Financial Officer of Puma.

First Quarter Results

In the first quarter of 2025, the company’s sales increased by 0.1% on a currency-adjusted basis (ca) to 2.08 billion euros, as compared to the same period last year. On a reported basis, sales decreased by 1.3% year-on-year.

Puma highlighted that, while its wholesale business decreased by 3.6% to 1.52 billion euros during the period due to softness in the US and China, its direct-to-consumer business grew by 12.0% (ca) to 546.5 million euros, led by its e-commerce business, which grew by 17.3% (ca). Meanwhile, sales in its owned and operated retail stores increased by 8.9% (ca).

From a regional perspective, on a comparable basis to the first quarter of 2024, Puma recorded an increase in sales of 5.1% (ca) in the EMEA region to 891.7 million euros. Conversely, sales in the Americas region fell by 2.7% (ca) to 753.7 million euros, due to a decline in North America, which was only partially offset by double-digit growth in Latin America. In the Asia/Pacific region, sales declined by 4.7% (ca) to 430.5 million euros, reflecting ongoing weakness in Greater China.

In the first quarter of the current financial year, the company’s gross profit margin fell by 60 basis points year-on-year to 47.0%, as the positive effects of inventory valuation and currency exchange rates were a headwind.

Puma reported that operating expenses (OPEX), excluding one-time costs, increased by 7.1% year-year in the first quarter to 904.9 million. This increase was primarily driven by the company's ongoing expansion of its direct-to-consumer (DTC) business, particularly in e-commerce, and by higher depreciation and amortisation resulting from investments in DTC operations and infrastructure.

The company’s first quarter adjusted EBIT (excluding nextlevel related one-time costs) decreased by 52.4%, as compared to the same quarter of 2024, to 75.7 million euros, due to a lower gross profit margin and higher OPEX. Consequently, the operating result (EBIT) decreased by 63.7% to 57.7 million euros from 159.0 million euros, and the EBIT margin came in at 2.8%.

In the first quarter of 2025, Puma’s net income totalled 0.5 million euros and earnings per share amounted to 0.00 euros, on a comparable basis to 87.3 million euros and 0.58 million euros in the same quarter of the previous year.

Outlook

For the full year, the sportswear company still expects currency-adjusted sales to grow by a percentage in the low to mid-single digits and adjusted EBIT between 520 and 600 million euros (2024: 622.0 million euros).

Puma acknowledges the ongoing changes to the additional US tariffs announced recently. However, at this stage, the outcome of these developments remains highly uncertain, so its outlook does not include potential tariff implications.

Markus Neubrand added: “Despite the challenges we had to face in the first quarter, such as a slightly decreasing gross profit margin and higher operating expenses, we remain committed to executing our nextlevel cost efficiency program which is progressing as planned. We are on track to have approximately 500 corporate positions reduced globally by the end of the second quarter 2025”.

Image Credits: retaildesignblog.net

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