Puma plans to lay off 500 employees globally

According to a report by Reuters, Puma's Chief Financial Officer, Markus Neubrand, announced on March 12 that the German sportswear brand plans to cut 500 jobs worldwide and close some unprofitable stores as part of its cost-cutting measures.

Puma initiated a cost reduction plan in January, leading to fluctuations in its stock price. The company's CFO released disappointing financial forecasts for the first quarter and the full year of 2025 later on Tuesday, primarily due to weak demand in the United States and China.

Puma expects its earnings before interest and taxes (EBIT) for this year to be between EUR 445 million and EUR 525 million, lower than the levels in 2024. Additionally, due to weak demand in Chinese mainland and the United States, revenue growth in the first quarter of this year is expected to be below the same period last year.

CEO Bjørn Gulden stated that Puma's target consumers in the U.S. have not been spending due to economic uncertainty, with poor performance in February and a slightly better start in March. When asked about the potential impact of U.S. import tariffs, Puma's management confirmed that shoes produced in China account for about 10% of U.S. shoe imports, down from 30% in the past. The company is currently urging suppliers to move production from China to other countries like Indonesia.

Puma's financial report for 2024 shows that the company achieved a year-on-year revenue growth of 4.4%, totaling EUR 8.817 billion. However, despite revenue growth, Puma's net profit experienced a 7.6% year-on-year decline, dropping to EUR 282 million, highlighting a significant stagnation in its profitability.

Weak market demand is an unavoidable issue for Puma. As its core markets, North America and China are both experiencing a slowdown in consumer demand. In particular, signs of market weakness have become increasingly evident in the Greater China region since the third quarter of 2024, with declining consumer purchasing power and weakened demand for high-end sports brands, putting significant pressure on Puma's sales growth.