Puma’s sales increased 4.4% in FY24, reaching a total of €8.81bn ($9.59bn), driven by growth across all regions, product divisions, and distribution channels.
Despite facing significant headwinds from currency fluctuations resulting in around €150m impact on sales figures, Puma said it maintained positive momentum.
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Puma chief executive officer Arne Freundt noted that the company had made considerable strides in implementing its Brand Elevation Strategy, which has positively impacted consumer perception and led to substantial growth in performance categories.
Freundt said: “However, despite these successes, I am not satisfied with our stagnant profitability. We must address our current cost trend and we have already been taking decisive actions to improve the situation with our next-level programme.”
Puma’s key metrics for FY24
Fiscal 2024 (FY24) brought about an improvement in Puma’s gross profit margin, which expanded by 100 basis points to reach 47.4%, compared to the previous year’s 46.3%. This was achieved despite currency pressures and promotional activities, thanks to a favourable mix of products and distribution channels as well as benefits from sourcing and freight costs.
Puma’s direct-to-consumer (DTC) business soared by 16.6%, generating €2.42bn in FY24, thanks to brand demand and the launch of new retail outlets.
Sales from owned and operated stores and e-commerce surged by 14.2% and 21.1% respectively over the fiscal. Meanwhile, the wholesale business saw a modest increase of 0.4%, amounting to €6.39bn.
The company’s operating expenses rose by 5.2%, reaching €3.58bn in FY24, due to expansion in DTC operations and investments in warehouse and digital infrastructure.
Its earnings before interest and taxes (EBIT) remained stable at €622.0m, maintaining last year’s level with an EBIT margin of 7.1%.
Driven by profitability gains in the US-based socks and bodywear segments, net income attributable to non-controlling interests increased to €60.7m in FY24, up from €55.7m in fiscal 2023.
However, net income saw a decline of 7.6%, settling at €281.6m, translating to earnings per share of €1.89.
The Americas led the regional growth with a 7.0% increase in sales, while the Asia/Pacific region followed closely with a 3.8% rise. The Europe, the Middle East and Africa region experienced a 2.1% boost in sales totalling €3.47bn.
Freundt said: “Strengthening our brand and our performance credibility is crucial for Puma’s sustainable success as a sports brand. I am also encouraged that we made progress in the transition of our Sportstyle Prime business. We implemented our new product, go-to-market, and marketing strategies for the first time for our Speedcat which shows promising sales numbers in its current go-to-market phase before scaling up this summer. All these important achievements in line with our strategic priorities would not have been possible without the great dedication and commitment of the whole Puma family and of its partners.”
Puma’s fourth quarter FY24 performance
Puma’s sales improved by 9.8% to €2.28bn, marking consistent progress throughout the year.
The company’s gross profit margin for this period improved slightly by 30 basis points to 47.3%.
Operating expenses for the quarter jumped by 15.8% to €982.2m, due to various factors including currency devaluation effects from the previous year, increased DTC share, and infrastructural investments.
Puma’s fiscal 2025 outlook
Freundt indicated that the company’s projections for 2025 fall short of the goals established previously for both revenue and earnings.
Puma anticipates ongoing geopolitical tensions and macroeconomic challenges such as trade disputes and currency volatility may dampen consumer sentiment in key markets. The brand projects low- to mid-single-digit percentage range growth in currency-adjusted sales.
The company will also implement its nextlevel cost efficiency programme which is expected to incur one-time costs of up to €75m related to store closures and restructuring efforts but aims to generate an additional EBIT of up to €100m in return.
Taking into account these one-time costs alongside continuous investments in marketing and infrastructure, Puma forecasts an adjusted EBIT ranging between €520m and €600m for financial year 2025 with capital expenditures estimated at around €300m.
In the first quarter of FY25, Puma expects low-single-digit currency-adjusted sales growth, slightly below last year, mainly due to weaker performance in the US and China.
Adjusted EBIT is forecasted at around €70m, impacted by inventory valuation changes, higher operating expenses, and different marketing expense timing. Including one-time costs. EBIT for Q1 FY25 is expected to be lower than €159.0m in Q1 2024.
“While 2025 will be a challenging year, I am particularly excited to see the impact of our new brand campaign, the launch of our latest running innovations and the build-up of further traction with our exciting products offers in the low-profile category,” Arne Freundt added.
