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(Bloomberg) -- Puma SE shares plunged the most on record after the sneaker maker disappointed investors with softer-than-expected results and forecast another year of slow growth.
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The stock tumbled as much as 25% in German trading to the lowest since 2016. It’s down about 50% so far this year, a far worse performance than either crosstown rival Adidas AG or industry leader Nike Inc.
The company forecast adjusted earnings before interest and taxes this year in a range between €520 million ($568 million) and €600 million, down from last year and below analysts estimates. Currency-adjusted sales will probably grow in the low- to mid-single-digit range, Puma said, citing trade tariffs, currency swings and geopolitical tensions.
The unexpectedly downbeat guidance marks the latest frustration for investors since Chief Executive Officer Arne Freundt took over at the end of 2022. In January, Puma reported disappointing fourth-quarter figures just weeks after Freundt had assured them the company was performing well.
The outlook raises doubts about whether Puma will be able to achieve its target of reaching an 8.5% Ebit margin by 2027 — a goal that Puma had already pushed back by two years in January, Cedric Lecasble, an analyst at Stifel, said in a note. “This new release strongly challenges the pillars of our investment case,” he said.
Attention will now shift to whether Puma can build momentum with its brand and with key shoe models that it’s hoping will take off with consumers this year, such as the thin-soled, 1990s-era Speedcat sneaker, Piral Dadhania, an analyst at RBC Capital Markets, said in a note.
Speedcat
Puma’s sales growth has slowed since Freundt took over from Bjorn Gulden, who left to lead Adidas. Freundt has said Puma needs to prioritize the buildout of sneaker models like the Speedcat that can command higher prices. Investors are closely watching how the sneaker performs this year, because it’s the first model that Freundt has sought to carefully incubate and then scale up for the masses.
At a press conference Wednesday, Freundt insisted that Puma is succeeding at making the brand more recognizable and desirable, citing feedback from consumer surveys and other internal data. Puma is focusing on sports like running and football, while looking to build out its offering of pricier footwear at retail outlets including JD Sports Fashion Plc.