Companies

Puma launches efficiency programme after profit miss

Jan 29, 2025 Germany

After reporting a full year net income below the previous year’s level and below expectations, the German-based sportswear company has launched a cost-efficiency programme

According to the preliminary 2024 results, sales grew by 2.5% or 4.4% on a currency-adjusted basis to 8.82 billion euros, as compared to the prior year. Puma highlighted that all regions, product divisions and distribution channels improved their currency-adjusted sales and that this growth was accompanied by a 100-basis point improvement in gross margin to 47.4%.

The company’s full year operating profit (EBIT) was 622 million euros, the same as in 2023 and in line with 2024 guidance, and the EBIT margin was 7.1%. However, the net profit of 282 million euros was below expectations, as compared to 305 million euros in 2023. The statement said this was mainly due to higher net interest expense and higher non-controlling interests.

“While we achieved solid sales growth in 2024 and made meaningful progress on our strategic initiatives, we are not satisfied with our profitability”, said Arne Freundt, CEO of Puma.

“With a heightened focus on translating top-line growth to increased profitability growth, we have initiated ‘nextlevel’, a comprehensive efficiency program targeting cost optimisation and operational improvements. Combined with decisive actions already taken, we will implement further cost control measures in 2025”, he added.

The “nextlevel” programme aims to help Puma achieve an EBIT margin of 8.5% by 2027 by optimising direct and indirect costs, including personnel expenses, through a better allocation of resources in line with our strategic growth areas. In doing so, it is expected to complement the brand elevation strategy, “which is building the foundation for sustainable and accelerated growth”. In the long term, Puma aims to achieve an EBIT margin of 10%.

Image Credits: about.puma.com

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