Puma SE reported flat year-over-year sales growth in the first quarter on a currency-adjusted basis, as Wholesale fell behind and Direct-to-Consumer (DTC) sales posted double-digit growth. The Wholesale decline was said to be primarily due to China and the U.S. One element the company did point out as a success in the quarter was progress against its NextLevel program, which will eliminate ~500 corporate positions globally by the end of the second quarter.

Sales Summary

  • Puma SE sales grew by 0.1 percent currency-adjusted (ca) to €2.08 billion (-1.3 percent reported).
  • EMEA region sales increased 5.1 percent (ca) to €891.7 million, reportedly driven by double-digit growth in EEMEA.
  • Americas region sales decreased 2.7 percent (ca) to €753.7 million, reportedly due to a decline in North America, while Latin America recorded double-digit growth during the quarter.
  • Asia/Pacific region sales decreased 4.7 percent (ca) to €430.5 million, reflecting ongoing softness in Greater China.

Channel Sales

  • Wholesale business decreased by 3.6 percent (ca) to €1.53 billion. As anticipated, the softness was said to be mainly driven by the U.S. and China.
  • DTC business grew 12.0 percent (ca) to €546.5 million, led by the e-commerce business, which grew 17.3 percent (ca), while sales in owned and operated retail stores increased 8.9 percent (ca). The DTC share rose to 26.3 percent, up from 23.5 percent in Q1 2024.

Category Sales

  • Footwear sales increased by 2.4 percent (ca) to €1.19 billion, reportedly driven by the Running, Basketball and Sportstyle categories.
  • Apparel sales decreased by 1.5 percent (ca) to €594.3 million.
  • Accessories decreased by 5.7 percent (ca) to €295.7 million due to weakness in Golf.

Income Statement Summary
Gross margin decreased by 60 basis points to 47.0 percent of net sales in Q1, compared to 47.5 percent in Q1 2024. Positive inventory valuation effects in the previous year and currency effects were a headwind, offset by tailwinds from sourcing, with a favorable effect from the product and distribution channel mix.

Operating expenses (OPEX), excluding NextLevel-related one-time costs, increased by 7.1 percent to €904.9 million, compared to €845.3 million in Q1 2024. The increase was said to be mainly due to the continued growth of the Puma DTC business, especially e-commerce, and higher depreciation & amortization (D&A) from investments in DTC and infrastructure. In addition, currency-related headwinds and timing of marketing activities weighed on the OPEX ratio, which increased by 340 basis points to 43.6 percent of net sales from 40.2 percent of net sales in Q1 2024.

Adjusted EBIT, excluding NextLevel-related one-time costs, decreased by 52.4 percent to €75.7 million from €159.0 million in Q1 2024 due to a lower gross profit margin and higher OPEX. Puma said it incurred one-time costs of €18.0 million in the first quarter as part of its NextLevel cost efficiency program. These costs were mainly associated with personnel expenses and other one-time non-operating costs. Consequently, the operating result (EBIT) decreased by 63.7 percent to €57.7 million, or 2.8 percent of net sales, compared to €159.0 million, or 7.6 percent of net sales, in Q1 2024.

The financial result decreased by 56.8 percent to negative €42.0 million, compared to negative €26.8 million in Q1 2024, mainly due to higher net interest expenses. Taxes on income amounted to negative €4.2 million versus negative €33.0 million in Q1 2024, with a tax rate of 26.5 percent (Q1 2024: 25.0 percent) driven by higher withholding taxes and a different profit mix.

Net loss attributable to non-controlling interests was at €11.1 million, compared to a loss of €11.8 million in Q1 2024.

Consequently, net income amounted to €0.5 million, or €0.00 per share, compared to €87.3 million, or €0.58 per share, in the 2024 first quarter.

Balance Sheet and Working Capital
Working capital increased by 12.8 percent year-over-year (y/y) to €2.08 billion.

Inventories increased by 16.3 percent to €2.08 billion at quarter-end from €1.79 billion at the first quarter-end 2024, said to be mainly driven by a strong increase in goods in transit.

Trade receivables increased by 5.9 percent y/y to €1.52 billion. Trade payables increased by 17.3 percent to €1.43 billion, said to be in line with the increase in inventories.

Share Buyback
On March 31, 2025, Puma completed the acquisition of shares within the framework of the share buyback program of Puma SE, which started on March 7, 2024. Under this program, the company repurchased 2,816,714 shares, representing approximately 1.88 percent of its nominal share capital. The average purchase price per share paid on the stock exchange was €35.50. The total price of the acquired shares amounted to €100 million, excluding incidental transaction costs.

Outlook 2025
In a challenging environment, Puma said its first quarter of 2025 performance was broadly in line with expectations. The company continues focusing on its controllables and expects currency-adjusted sales to grow in the low- to mid-single-digit range in the financial year 2025.

Puma said it continues to execute the NextLevel cost efficiency program, which it expects to incur one-time costs of up to €75 million in 2025. These one-time costs are related to the closure of unprofitable owned and operated retail stores, restructuring expenses and other one-time non-operating costs. In return, the company expects to generate additional EBIT of up to €100 million in 2025.

To better reflect the underlying business performance, the company provided an adjusted EBIT outlook for 2025, which excludes one-time costs related to the NextLevel cost efficiency program. Accordingly, Puma expects an adjusted EBIT of €520 million to €600 million for the 2025 financial year, compared to €622.0 million in 2024.

Puma said in its Q1 report that it acknowledges the ongoing changes to the additional U.S. tariffs.

“At this stage, the outcome of these developments remains highly uncertain and therefore this outlook does not include potential implications from tariffs announced after Puma’s initial outlook on March 11, 2025,” the company said.

Puma said it plans to continue investing in its retail store network and e-commerce business, along with warehouse and digital infrastructure, to enable its long-term growth objectives and therefore anticipates capital expenditures (CAPEX) of around €300 million in 2025 (2024: €263.0 million).

“While the environment remains volatile, the company continues to focus on its controllable. Puma is committed to addressing short-term challenges while continuing to prioritize investments into the brand and infrastructure as the foundation for mid- to long-term success,” the company concluded.

Image courtesy Puma SE