Puma (PMMAF) , which is famous for its athletic footwear, recently launched ad campaigns with celebrities such as A$AP Rocky, Winnie Harlow and Dua Lipa. However, it is sounding the alarm on a major shift in customer behavior.
Even though Puma generated a boost in sales during the holiday season last year, with sales increasing by almost 10% year-over-year, it recently flagged that its performance is softening in the U.S. and China.
According to a new press release, Puma said that the drop in sales is due to “ongoing geopolitical tensions and economic challenges,” which it expects will continue throughout the rest of the year.
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Puma unveils troubling outlook on future sales
Currently, in the U.S., many consumers are anticipating higher prices after President Donald Trump recently imposed 20% tariffs on all goods imported from China. He also imposed 25% tariffs on all goods imported from Mexico and Canada.
According to a recent Market Pulse survey from InMoment, 56% of consumers expect prices for goods and services to increase as a result of Trump’s tariffs.
Boxes of Puma AG sneakers sit on display at the company’s store in Herzogenaurach, Germany, on Tuesday, Feb. 15, 2011.
In response to these expected price hikes, 60% of consumers said they are contemplating changing their shopping behavior, with more expecting to shop less rather than more.
Amid this consumer trend, Puma predicts that its sales growth in 2025 will be “low-single-digit below last year’s level,” mainly due to the challenges it faces in the U.S. and China.
It also expects its earnings before interest and taxes (EBIT) to fall between €520 million and €600 million (or $564 million and $651 million), missing forecasts.
Puma makes a harsh cost-cutting move
As Puma anticipates lower sales, CEO Arne Freundt also announced that the company will be cutting 500 jobs worldwide.
Puma has about 20,000 employees globally, and 150 jobs will be cut at the company’s headquarters in Herzogenaurach, Germany.
The move from Puma comes after it launched a cost-cutting initiative called “Nextlevel” in January. The initiative aims to achieve an EBIT margin of 8.5% by 2027.
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“I am not satisfied with our stagnant profitability,” said Freundt in Puma’s fourth-quarter earnings report for 2024. “We must address our current cost trend, and we have already been taking decisive actions to improve the situation with our Nextlevel program.”
He also emphasized that Puma is operating in a “volatile environment,” which requires the company to rethink its strategy.
“We are fully aware of the root causes of our challenges and are addressing them with full focus and rigor,” said Freundt. “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.”
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