Shares in Puma SE took a painful hit this week, plunging nearly 19%, as the German sportswear giant slashed its full-year outlook and warned of a loss for 2025. But behind the headlines, a deeper story of transformation may be just beginning.
The company, grappling with slumping sales in North America, Europe, and Greater China, has laid bare the scale of the challenge ahead: an expected €600 million swing from a projected profit to a full-year loss. And roughly €700 million in market value was wiped out in a single trading day, Puma’s worst since March.
Yet for long-term investors, this could be less of a red flag and more of a strategic inflection point.
Why the Drop? Missed Trends, Missed Targets
At the heart of Puma’s troubles lies a failure to capture cultural momentum in the sneaker world. While Adidas soared on the back of retro hits like the Samba and Gazelle, Puma’s thin-soled Speedcat and related lifestyle models simply failed to resonate. What was supposed to be a breakout moment fizzled into a niche offering.
Meanwhile, rising US tariffs are expected to cost the company €80 million in gross profit this year alone, and high inventory levels are putting pressure on margins. Sales in the second quarter fell short of expectations, and wholesale performance dropped 6%, a blow too large for direct-to-consumer growth (up 9%) to offset, especially given the heavy promotions needed to drive that growth.
Enter Arthur Hoeld: A Turnaround in the Making?
There’s a new player calling the shots: Arthur Hoeld, a former Adidas executive credited with driving the Samba resurgence, took over as CEO on July 1st. Just weeks into his tenure, Hoeld isn’t sugar-coating Puma’s reality.
“We have tremendous potential with a brand that hasn’t been unlocked yet,” he said. “But a brand that also requires a reset and a new way forward.”
Hoeld plans to spend the summer speaking with employees, retailers, brand partners, and investors, before laying out a clear strategic roadmap by October. 2026, he notes, will be a transition year, not a sprint to recovery but a steady realignment.
What Analysts Are Saying
- Jefferies: Forecasts 20% sales decline in H2; wholesale weakness a key concern.
- Citi: Notes the 9% DTC growth was likely driven by deep discounts, not a healthy sign.
- Warburg Research: Calls the new outlook a “big bath,” signaling Hoeld’s intent to clean the slate and start fresh.
Investor Take: Short-Term Pain, Long-Term Opportunity?
There’s no denying Puma’s current challenges are significant. But strategic resets—especially under bold new leadership, can often mark buy-in moments for patient investors.
Let’s look at the fundamentals:
- Valuation has dropped over 55% this year, bringing the stock back to early-pandemic levels.
- New leadership with a proven track record in trend-setting at Adidas.
- A likely period of brand reinvention and operational realignment.
- Long runway ahead with a massive global footprint, especially in underleveraged DTC channels.
🟢 Our View: Accumulate on Weakness (Long-Term Buy)
In the short term, expect continued volatility, especially as tariffs, high inventories, and brand repositioning weigh on results. But for long-term investors with an appetite for risk and an eye on turnaround stories, Puma may be entering a compelling accumulation zone.
Watch closely for Hoeld’s October strategy reveal. If it includes product revamps, lifestyle reinvigoration, and credible operational resets, Puma could pounce back stronger than ever.
Bottom line: This is a stock under pressure, but not without promise. Buy the dip? Not for everyone, but for contrarian investors, the reset may be the real entry point.