Global sportswear giant Puma has revealed a cost-cutting initiative following a disappointing 2024 financial performance, with its net profit falling short of expectations. Despite achieving notable sales growth, the company’s profitability took a hit, prompting a strategic shift to improve margins in the coming years.
In its preliminary 2024 financial results released after markets closed, Puma reported a net profit of 282 million euros ($294 million), a decline from the 305 million euros earned in 2023. The company attributed the decrease in profit to higher interest payments on its debt and increased non-controlling interests.
A Puma spokesperson explained that its joint venture with United Legwear & Apparel Co. (ULAC) contributed positively to overall profits. However, due to the partnership structure, Puma could only book 51% of the profit, with the rest allocated to ULAC.
Arne Freundt, CEO of Puma, acknowledged the company’s achievements in sales growth and strategic progress but expressed dissatisfaction with the overall profitability. Freundt remained optimistic about the future, stating, “We expect stronger growth in 2025 than last year.”
Puma’s earnings before interest and tax (EBIT) margin for 2024 was 7.1%, a figure the company aims to improve significantly. The cost-cutting program is designed to restore Puma’s EBIT margin to 8.5% by 2027, with a long-term goal of reaching 10%.
Puma’s cost-cutting plan will target areas like personnel expenses and resource allocation. However, the company has emphasized that it intends to maintain a stable workforce, with no global layoffs currently planned.
Despite the profitability concerns, Puma reported strong sales growth in key regions and product categories. For the fourth quarter of 2024, a crucial shopping season, sales rose by 9.8% in currency-adjusted terms, reaching 2.289 billion euros ($2.38 billion).
For the entire year, Puma’s sales increased by 4.4% in currency-adjusted terms, totaling 8.817 billion euros. The company’s sales saw significant growth in specific regions:
- Europe, Middle East, and Africa: 14.3% growth in Q4
- Greater China: 7.4% growth in Q4
In terms of product categories, Puma’s footwear sales—its largest segment—grew by 9.2%, while apparel sales climbed by 8.8% during the fourth quarter.
Puma plans to release its full fourth-quarter and annual results on March 12, providing a more detailed look at its performance. The company is optimistic about achieving stronger growth in 2025 and beyond, supported by strategic initiatives and cost-management measures.
