Home / Business and Economy / Puma Slashes Earnings Forecast Amid Weak Demand and Tariff Concerns
Puma Slashes Earnings Forecast Amid Weak Demand and Tariff Concerns
24 Jul
Summary
- Puma expects to report a loss in adjusted earnings this year, a major downgrade from previous forecasts
- Weaker sales in North America, Europe, and China, leading to high inventory levels
- Puma anticipates US tariffs will hurt gross profits by about €80 million this year
Puma SE, the German sportswear company, has been forced to drastically downgrade its earnings forecast for the current year (2023). In a statement released late last week, the company announced that it now expects to report a loss in adjusted earnings before interest and taxes, a far cry from its previous target of profits between €520 million and €600 million.
The company's preliminary second-quarter results showed disappointing sales and profits, missing analyst estimates. Puma cited weaker demand for its products in North America, Europe, and Greater China during the second quarter, a trend that is expected to continue through the rest of the year, leading to high inventory levels.
Adding to Puma's woes are the anticipated impacts of US tariffs, which the company estimates will hurt its gross profits by around €80 million in 2023. This is a significant blow to the brand's bottom line.
The downgrade comes just weeks after Puma's new CEO, Arthur Hoeld, took over the helm on July 1st. Hoeld, a veteran from rival Adidas, is now tasked with resetting the brand and reconnecting it with consumers, who have been slow to embrace Puma's recent product offerings.
