2/28/2024

Puma announces brand promotion campaign

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Key points:

  • The German company Puma predicts disappointing results for the first half of 2024.
  • However, the company did not adjust the annual goals announced in January.
  • Puma shares have lagged Nike and Adidas over the past year.

German sportswear and footwear maker Puma is forecasting disappointing results for the first half of 2024, citing challenging market conditions.

However, the company did not adjust the annual goals announced in January. To strengthen its position, Puma is launching a new marketing campaign aimed at promoting the brand.

Against the backdrop of this news, the company’s shares showed slight growth, but fell by 2% in the last session.

Company plans

As part of its efforts to strengthen the brand, which has been underway for several years, Puma will launch a new marketing campaign in April.

In recent years, the company has taken a number of steps to enhance its image, such as establishing collaborations with more prestigious retailers, developing products tailored to specific markets, and collaborating with a limited number of high-profile ambassadors. For example, in 2023, Puma entered into a partnership with pop star Rihanna, and also signed contracts with rapper A$AP Rocky and football player Jack Grealish.

The company is noticeably behind its competitors

Puma shares have underperformed Nike and Adidas over the past year, weighing on the company’s valuation. Analysts believe a share buyback worth perhaps hundreds of millions of euros could be one way to improve matters.

Sales of Puma in the EMEA region (Europe, Middle East and Africa) fell 5.2% to 668 million euros in the fourth quarter. This is a stark contrast to the 9.9% year-on-year growth recorded in the third quarter.

Puma said the slowdown was due to excess inventories at retailers in the region. The company sells most of its products through retail partners, although revenue from its own stores has shown growth.

Puma has confirmed its forecast for 2024, namely:

  • Average annual single-digit percentage growth in currency-adjusted sales.
  • Earnings before interest and taxes of €620 million to €700 million.
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