German sportswear company Puma has today forecast sales and profits this year below analyst expectations, sending its shares down over 8% to their lowest since 2018, blaming a tougher economic environment and softer demand.
The company said it expected mid-single-digit growth in currency-adjusted sales this year, compared with the 6.6% growth delivered in 2023.
It also projected earnings before interest and tax (EBIT) of €620-700m, below the consensus forecast of €726m, according to Citi analysts.
"We are surprised and disappointed by the magnitude of the lower guidance (versus) our below-consensus expectations," RBC analyst Piral Dadhania said in a note to investors.
Many retailers are struggling as high interest rates and uncertainty about economic prospects amid wars in Ukraine and the Middle East weigh on consumer spending.
"For 2024, we foresee the geopolitical and macroeconomic challenges as well as highly volatile currencies to persist. This continues to weigh on consumer sentiment and demand, especially in the first half of 2024," Puma's CEO Arne Freundt said in a statement.
After clearing its inventories, however, the company is in a better position than it was at the start of 2023, with an innovative product pipeline and plans to launch its new brand campaign soon, Freundt added.
The comments echo rival Nike, which trimmed its annual sales forecast in December and announced a $2 billion cost-saving programme.
For 2023, Puma reported sales of around €8.60 billion and EBIT of about €622m, broadly in line with its forecast for high single-digit sales growth and EBIT of €590-670m.
The company said the results were hit by a 54% plunge in the value of the Argentine peso in December.
