PUMA’s Share Price Takes a Hit as Profit Forecast is Narrowed
German sportswear giant PUMA has been making headlines this week, but not for the reasons they had hoped. The company’s share price dropped to a six-year low after announcing a narrowed profit forecast for the year. According to MarketWatch, this is due to “cautious consumer sentiment and higher freight costs.”
In its latest earnings report, PUMA revealed that its full-year profit is now projected to be between €620 million EUR and €670 million EUR, down from the original estimate of €700 million EUR. This news caused a 13% decrease in PUMA’s shares, which now sit at €36.20 EUR, marking a 30% decrease for the year.
Despite reporting a 2.1% increase in currency-adjusted sales in the second quarter, reaching €2.12 billion EUR, PUMA’s profit before interest and tax was only up by 1.6% at €117 million. This fell below analyst expectations, as reported by Fashion United. Sales in the Americas saw a 9% increase, while Europe, the Middle East, and Africa experienced a 4.3% decrease in revenues.
“We fully delivered on our outlook for the quarter and are well on track to deliver on our outlook for the full year,” said Arne Freundt, PUMA’s CEO, in a statement. However, despite meeting their quarterly outlook, the company still lowered its profit forecast, causing shares to plummet. Freundt also acknowledged the challenges faced by the company, stating that “an environment of increased currency headwinds, stressed supply chains, and macroeconomic and geopolitical challenges” have impacted their results.
To see PUMA’s full Q2 2024 report, click here.
