Investing.com -- Puma SE (ETR:PUMG) launched a cost-cutting programme as it issued a preliminary result with decline in operational profit.
Net income of the German sportswear company dropped to €282 million from €305 million in 2023, due to higher net interest expenses and increased non-controlling interests.
Shares fell 16% in early trading on Thursday.
Puma’s full-year operating profit (EBIT) remained steady at €622 million, reflecting a margin of 7.1%. The cost efficiency program called “Nextlevel” is aimed at achieving an EBIT margin of 8.5% by 2027.
Though, Puma reported a 9.8% currency-adjusted sales increase to €2.29 billion in the fourth quarter of 2024, with reported sales growth of 15.5%. Full-year sales rose 4.4% on a currency-adjusted basis to €8.82 billion, aligning with the company's outlook.
Fourth-quarter EBIT rose to €109 million, up from €94 million in the same period last year, while net income climbed to €24 million from €1 million.
Puma will release audited financial results for 2024 and its 2025 outlook on March 12.
"While we note that PUMA will continue to make strategic investments in its brand to accelerate growth, we wonder if the incremental effort on cost control will dilute management's focus on growing the business among increasing competition," Barclays (LON:BARC) analyst Wendy Liu said in a client note.