Puma Shares Plunge 17% After Outlook Slashed on Tariff Impact

Puma (PMMAF, Financials) shares tumbled as much as 18% before finishing 17% lower on Friday after the firm warned that its profits will fall because of rising U.S. import tariffs and problems within the company.

The German sportswear business now thinks that full-year sales will drop by a low double-digit amount and that it will lose money in 2025. This is a big change from its earlier prediction of up to 525 million ($614 million) in profit.

Arthur Hoeld, who became CEO on July 1 to spearhead a turnaround, said, We need to take a hard look at ourselves. Hoeld said in a media teleconference that Puma didn't live up to its own goals and that weak brand momentum, problems with channel mix, and too much inventory were among problems.

LSEG said that second-quarter revenues declined 2% year over year, to 1.94 billion ($2.27 billion), which was less than analysts had expected, which was 2.06 billion. The adjusted operating profit went from a profit of 13.2 million to a loss of 13.2 million. The company also had one-time costs of 84.6 million connected to its attempts to minimize costs.

Sales in North America fell by 9%, while sales in Europe and Asia-Pacific also fell, which caused the slump.

Puma said it sent more shipments to the U.S. ahead of projected tariff hikes, which caused its inventory levels to rise. Even though the company plans to raise prices in the fourth quarter, it thinks tariffs will cost them 80 million in gross profit in 2025.

Puma said at the beginning of this year that it would wait for bigger American brands to raise prices in the American market. "We don't want to be the leader," CFO Markus Neubrand stated in May.