European stock markets opened with a mixed performance on Thursday after a week of positive momentum.
The pan-European Stoxx 600 was flat at 8:34 a.m. London time, while individual markets saw slight movement, with the FTSE 100 up 0.05%, Germany’s DAX inching 0.13% higher, and France’s CAC 40 also gaining 0.13%.
However, one notable development was Puma’s disappointing performance. Shares of the German sportswear company dropped by as much as 19% in early trading after it missed its 2024 net profit expectations. At 8:36 a.m. London time, the stock was down 16.5%, hitting a 52-week low.
Puma’s announcement revealed that its net income for 2024 had fallen by 7.5%, to €282 million ($293.2 million), compared to the previous year. This profit decline, coupled with weaker-than-expected fourth-quarter sales, prompted analysts at broker Metzler to downgrade the stock to a “hold” rating.
The company reported that fourth-quarter revenue grew by 9.8% in currency-adjusted terms, falling short of its guidance for double-digit growth and missing analysts’ expectations of a 12% increase. Earnings before interest and tax (EBIT) remained flat at €622 million, below the expected €644 million.
Puma’s performance contrasts sharply with its competitor Adidas, which reported 19% growth in fourth-quarter figures earlier in the week. While Puma continues to market new products such as its Speedcat line, its sales growth has faced increased competition, especially from newer brands like On Running and Hoka, which have gained traction in the sportswear market.
To address these challenges, Puma has initiated a cost-cutting program, aiming for an EBIT margin of 8.5% by 2027, up from 7.1% in 2024. However, analysts are concerned that this focus on cost control might divert attention from driving sales and accelerating brand momentum.
Puma is set to release its full-year report on March 12, where it will provide more detailed guidance and insights into its strategy moving forward. The company’s shares are currently on track for their worst day since March 2018, reflecting investor concern over its ability to compete with larger rivals like Adidas and Nike in the increasingly competitive sportswear industry.
Meanwhile, European investors also tuned in for other global events, including US President Donald Trump’s address at the World Economic Forum in Davos, where discussions on key economic and geopolitical issues, including tariffs and international relations, were expected to draw attention.
With input from CNBC, Reuters, and Market Watch.
