BERLIN – Organic sales at Puma fell 10.4 percent in the third quarter to 1.96 billion euros.
The German activewear firm blamed a strategic “reset” as it navigates “several company-specific challenges, including muted brand momentum, elevated inventory levels across the trade and low quality of distribution,” it said in a statement.
Measures taken so far included reducing undesired wholesale business and excess inventory at retail, as well as curbing promotional activity. All of these impacted Puma’s performance in the third quarter, both at wholesale and in its own stores and online sales, the company explained.
Puma is also planning to reduce its “white collar” workforce by 900 positions, the company announced.
Puma’s new chief executive Arthur Hoeld — who previously held a number of different leadership positions at Adidas — only took on the top job in July. He is leading the restructuring and said the company would be “more efficient and resilient” and was “committed to executing these measures with discipline.”
Hoeld said Puma likely won’t return to healthy growth until 2027, with next year being all about “transition.”
The company’s earnings before income tax, or EBIT, also collapsed in the third quarter, with both adjusted and reported EBIT falling by over 80 percent.
Puma saw the biggest declines in the Americas, where sales in currency neutral terms fell 15.2 percent to 678.1 million euros, driven mostly by drops in North America.
In the Asia-Pacific region, sales dipped 9 percent, and in Puma’s home market of Europe, the Middle East and Africa, they fell by 7.1 percent. The company said Europe in particular was impacted by “takebacks and the deliberate scaling back of undesired business.”
Puma saw footwear sales fall 9.9 percent to 1.05 billion euros in the third quarter. The company’s offering in the so-called “low profile” trend, the Speedcat, has not been doing as well as it expected, it said.
Puma apparel slipped 12.8 percent, dragged down by the lifestyle segment. Accessories fell 6.1 percent.
Puma had already slashed guidance for the whole year in the summer. The German brand confirmed those cuts on Thursday. It still expects sales for the whole year to drop by low-double digits and reiterated its profit warning.
Earlier in the year, before the change of management, the company had been predicting low growth and a positive EBIT somewhere between 445 million and 525 million euros.
