Strategic reset costs Puma €643.6m as sales fall 8.1% in 2025

The big cat has landed hard: Puma closes the 2025 financial year with a net loss of €643.6 million. Currency-adjusted sales fell by 8.1 percent to €7.30 billion, and the EBIT margin slipped significantly into negative territory at minus 4.9 percent. The final quarter was particularly painful: Revenues slumped by more than 20 percent in Q4, and operating profit turned clearly negative.

CEO Arthur Hoeld spoke of a “reset year” in the earnings call. He said the company had deliberately sacrificed sales in order to readjust distribution, brand image and cost base. Hoeld admitted that this was the largest decline in the company’s recent history but said that the figures had to be viewed “in relation to the current size of the company.” In the short term the cutback is expensive, but in the long term it should lay a foundation for profitable growth.

Balance sheet under pressure – debt rises significantly

The balance sheet shows how expensive the reset really is. Free cash flow turned significantly negative in 2025 at €-530.3 million, compared to €464.3 million in the previous year. Net debt jumped to €1.06 billion, a dramatic increase from €119.8 million at the end of 2024. In addition to the operating loss, the main drivers were the build-up of working capital and merchandise returns from retailers.

Inventories stand at €2.06 billion. Although management says it is “slightly ahead of schedule” in reducing inventory, the level is not expected to normalize until the end of 2026. To secure liquidity, Puma has secured additional credit lines, with €1.20 billion unused. The dividend for 2025 has been canceled.

The wholesale problem and the costly reset

The main problem in 2025 was in the wholesale business – and its radical restructuring. For years, the sporting goods producer from Herzogenaurach had been heavily dependent on volume-driven wholesale, especially in the North American mass merchant business. With the strategic decision in the third quarter of 2025 to consistently reduce unprofitable channels, the company initiated a far-reaching distribution restructuring. The operational implementation followed immediately: goods were withdrawn from retail, order volumes were cut, and promotions were significantly reduced in order to strengthen the brand positioning. As a result, sales declined faster than the cost base could be adjusted.

At the same time, high inventories led to additional write-downs and put pressure on the gross margin, which fell by 260 basis points to 45.0 percent. As fixed costs remained largely stable, the operating leverage had a fully negative effect. This was compounded by restructuring expenses, goodwill write-downs, currency effects, and weaker demand in North America and China. The high loss is therefore less the reflection of a singular mistake than the result of a deliberate but costly reset in an already challenging market environment.

Regional imbalances exacerbate pressure

Regionally, the decline hit the Americas region particularly hard, where sales fell by 10 percent on a currency-adjusted basis. In Asia-Pacific, revenues declined by 7.4 percent, weighed down by Greater China. EMEA proved comparatively robust with a decline of 6.9 percent but also remained below the previous year’s level.

Double challenge in China: The country is too important for Puma to waver there – it generates around a third of the company’s Asian business. Operations are weaker. And strategically, the Anta entry adds additional tension.

ANTA entry: ‘Too early for speculation’

In connection with the entry of Anta Sports (now one of the world’s highest-grossing sporting goods companies) into Puma, the German CEO was demonstratively cautious but constructive. The strategic direction – a return to profitable growth and the ambition to become a top-three sports brand – remains unchanged. When asked during the earnings call, Hoeld emphasized several times that he sees the investment as a “strategic investment” with medium- to long-term potential, especially for the China business, but also beyond. However, no concrete operational changes have been decided at this time, as it is “too early for speculation.” In the short term, there may even be some irritation in the Chinese market, as Puma operates there with a mixed franchise and wholesale model.

The Chinese group announced the acquisition of a 29.06 percent stake at the end of January. This is still subject to the usual conditions precedent. Puma’s management did not comment on the exact closing date, pointing out that this is an ongoing process. Overall, it signaled openness to the partnership, but avoided making any statements on possible governance or control issues. This is an indication that although the talks are viewed positively, the strategic consequences are still open.

A crisis with warning signs – and competitors

Puma is in good company with its problems. Industry leader Nike is also struggling with inventory reduction, margin pressure and a difficult wholesale mix, while Under Armour has been working on its strategic realignment for years. The proof that a turnaround can be successful comes from Herzogenaurach: Adidas has returned to profitability after its own crisis.

For the big cat, this means that industry pressure is real – and not an isolated fate. According to Hoeld, 2025 was the reset year, and 2026 remains a transition year. Adjusted for currency effects, revenues are expected to continue to decline in the low- to mid-single-digit percentage range, with operating income expected to be between negative €50 million and negative €150 million. Investments of around €200 million are planned, primarily for digitalization and the expansion of the company’s own sales channels. US customs policy also remains a risk factor. In 2025, negative effects were still offset by lower procurement costs. However, Puma remains cautious for 2026 – the overall trade policy situation is too uncertain.

Lost in 2025, targeting 2027 – can Puma’s sprint succeed?

However, ambitions remain high. From 2027, Puma wants to return to “healthy, above-average growth” and back onto the podium of global sports brands. It remains to be seen whether sprinting Puma has taken enough run-up for this. Now it is still running against the wind – but hope is already sprouting on the stock market. After the figures were presented, the market reacted with cautious optimism and the share price rose at times. Investors are betting that the low point may have been reached and that the reset will lay the foundation for a sustainable recovery. However, whether the big cat can pick up speed will only become clear in the coming quarter.