• Revenue: EUR8.8 billion, highest sales ever, with a 4.4% increase in constant currencies.
• Gross Margin: Improved by 100 basis points to 47.4% for the full year.
• EBIT Margin: 7.1%, 10 basis points below last year.
• Net Income: EUR24.5 million for Q4, 7.6% below last year for the full year.
• Q4 Sales Growth: 9.8% currency adjusted, with e-commerce growing at 22%.
• Regional Performance: EEMEA grew 26%, Europe 10%, North America 2.4%, Latin America 13%, Greater China 7%, and APAC 10%.
• Operating Expenses: Increased by 5.2% for the full year, with a focus on digital infrastructure and warehouse investments.
• Free Cash Flow: Increased by EUR95 million to EUR464 million in 2024.
• Inventory: Increased by approximately 12% due to goods in transit for 2025 product cycle.
• Dividend Proposal: EUR0.61 per share for the financial year 2024.
• Nextlevel Program: Expected to incur one-time costs of up to EUR75 million in 2025, aiming for an EBIT margin of 8.5% by 2027.

• Warning! GuruFocus has detected 4 Warning Signs with PMMAF.

Release Date: March 12, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Puma SE (PMMAF) recorded its highest sales ever in 2024, reaching EUR8.8 billion, with a 4.4% increase in constant currencies.
• The company showed a solid improvement in profit margins, with a gross margin increase of 100 basis points to 47.4%.
• Puma SE (PMMAF) made meaningful progress in its brand elevation strategy, launching its first brand campaign in 10 years and improving brand KPIs.
• The company achieved growth across all regions, product divisions, and distribution channels, with particularly strong growth in e-commerce at around 22%.
• Puma SE (PMMAF) has made significant progress in sustainability, achieving 22 out of 28 targets in its Agenda 10 for '25 and reducing CO2 emissions.

Negative Points

• Despite sales growth, Puma SE (PMMAF) was unable to translate this into additional profitability, with net income below the prior year.
• The company's 2025 outlook is below initial expectations, with anticipated sales growth in the low to mid-single digits.
• Puma SE (PMMAF) faces challenges in the US and China markets, with softer consumer sentiment and traffic impacting sales.
• The company anticipates geopolitical tensions and macroeconomic challenges to continue, affecting consumer demand in key markets.
• Puma SE (PMMAF) has a higher exposure to FX volatility compared to competitors, impacting its financial performance.

Q & A Highlights

Q: Can you discuss the regional outlook for 2025, particularly regarding potential headwinds and growth expectations? A: Growth is expected to be driven by Latin America and EMEA, while mature markets will contribute positively but to a lesser degree. Direct-to-consumer (DTC) growth is anticipated to outpace wholesale, although we aim for wholesale to contribute more meaningfully in the future. - Arne Freundt, CEO

Q: What has changed in the US and China markets since your last guidance update, and how does this affect your confidence in achieving growth in 2025? A: The US market experienced unexpected softness in February, particularly affecting Hispanic consumers. In China, while online and outlet shopping remains strong, brick-and-mortar traffic is soft. Despite these challenges, we expect growth to accelerate in the remaining quarters due to a solid order book and ongoing DTC momentum. - Arne Freundt, CEO

Q: How is the Speedcat product performing, and what are your expectations for its sales in 2025? A: The Speedcat family, including the Speedcat Ballet, is expected to achieve mid-single-digit million pairs in sales. Demand is building month over month, and we remain confident in its potential, especially as the low-profile trend gains traction. - Arne Freundt, CEO

Q: Can you elaborate on the Nextlevel program's impact on cost savings and profitability targets for 2025 and beyond? A: The Nextlevel program aims to improve gross profit margins and reduce OpEx through initiatives like complexity optimization and FOB reductions. We expect an EBIT contribution of EUR100 million in 2025, with further benefits anticipated in 2026 and 2027 as we continue to streamline operations and enhance efficiencies. - Markus Neubrand, CFO

Q: What are the root causes of the current challenges, and how are you addressing them? A: Key challenges include market growth assumptions, brand strength, and cost structure. We are focusing on strengthening the brand, optimizing natural hedges, and investing in automated warehouses to improve long-term cost efficiencies. The Nextlevel program addresses cost complexities and redundancies. - Arne Freundt, CEO

For the complete transcript of the earnings call, please refer to the full earnings call transcript.