MW Puma stock slumps, a day after Adidas rally. New Speedcat range may be to blame.

By Steve Goldstein

Puma revenue and profit miss analyst expectations

Puma shares slumped on Thursday as the German apparel maker's preliminary fourth-quarter numbers disappointed analysts.

Puma reported fourth-quarter revenue growth, at constant currencies, of 9.8% to EUR2.29 billion ($2.38 billion), missing its own guidance for double-digit sales growth, and consensus expectations of 11.9% growth.

Puma said earnings before interest and tax will be flat at EUR622 million, below expectations of EUR644 million and at the low end of its guidance range.

Puma also said it's starting a new cost-savings program in an effort to get an 8.5% margin by 2027.

Puma shares (XE:PUM) skidded 16% in early trade.

"We have not typically seen Puma as a candidate for cost control, and note that, in our experience, companies in consumer discretionary tend to be rewarded in the long term for earnings growth driven by the successful delivery of accelerating brand momentum (which we do not see much evidence of), rather than cost reduction (as we have seen in recent quarters with Hugo Boss)," said analysts at JPMorgan led by Olivia Townsend.

The disappointment could be related to Puma's Speedcat range, the analysts added. The Speedcat range was described by Vogue as a "streamlined shoe inspired by fireproof, high-top pairs worn by Formula 1 drivers in the 1980s that rose to prominence in the 2000s."

Compared to Adidas (XE:ADS), whose shares rallied on Wednesday, the two sets of results demonstrate the importance of brand momentum, even in a relatively strong market like the U.S., the JPMorgan analysts said.

Puma said it will release its full fourth-quarter results on March 12.

-Steve Goldstein

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January 23, 2025 03:54 ET (08:54 GMT)

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