Puma launches cost-cutting drive after 2024 internet revenue disappoints

By Helen Reid

LONDON (Reuters) – Sportswear model Puma (OTC:PMMAF) introduced a cost-cutting programme on Wednesday after reporting 2024 internet revenue under the prior yr’s degree, lacking its expectations.

Web revenue was 282 million euros ($294 million) for the yr, in comparison with 305 million euros in 2023, Puma stated in preliminary outcomes launched after markets closed, including that greater curiosity funds on its debt damage revenue.

“Whereas we achieved stable gross sales development in 2024 and made significant progress on our strategic initiatives, we’re not happy with our profitability,” stated Arne Freundt, CEO of PUMA, with out saying what its expectations have been.

Freundt added that he expects stronger development in 2025 than final yr.

Web revenue was additionally impacted by greater non-controlling pursuits, Puma stated. Its three way partnership with United Legwear & Attire Co (ULAC) did nicely, a spokesperson stated, nevertheless it may solely e book 51% of the revenue, with the rest going to ULAC.

The price-cutting programme goals to get Puma again to an earnings earlier than curiosity and tax (EBIT) margin of 8.5% by 2027. Puma goals for a ten% EBIT margin in the long run. The EBIT margin for 2024 was 7.1%.

Puma stated the programme would search for financial savings in areas like personnel bills, however a spokesperson stated Puma goals to maintain its headcount secure and has no world goal for layoffs.

“We are going to make sure that we allocate sources the place we’d like them to drive our development,” the spokesperson stated in an e mail.

For the fourth quarter, a key purchasing interval, Puma’s gross sales grew by 9.8% in currency-adjusted phrases, to 2.289 billion euros ($2.38 billion).

Over 2024 as an entire, gross sales have been up by 4.4% in currency-adjusted phrases, to eight.817 billion euros.

Puma’s fourth-quarter gross sales grew by 14.3% in Europe, Center East and Africa area, and seven.4% in Larger China. Gross sales of footwear, Puma’s greatest class, have been up 9.2% over the quarter whereas attire gross sales grew by 8.8%.

Puma will launch its full fourth-quarter and annual gross sales on March 12.

($1 = 0.9602 euros)