Puma warned of losses and lower revenue in the coming year. Why the stock is rising

German sports retailer Puma has canceled dividend payments and said it expects another loss this year. At the same time, the company's losses for last year were less than analysts predicted. This supported the quotes of Puma on Thursday, February 26.

- Puma projected an operating loss in the range of €50 million-€150 million ($59 million-$177 million) in 2026 and said it is refusing to pay a dividend for fiscal 2025 as it intends to sell off excess sneaker and apparel inventory and pave the way for a return to profitable growth in 2027.

- The company also forecasts revenue in 2026 to decline about 1-5% in currency-adjusted terms, in line with analysts' expectations, Bloomberg reports.

- Puma's fourth quarter 2025 revenue fell 27% year-on-year to €1.56 billion, but the company still beat analysts' forecasts. Rising demand for Puma's premium running sneaker models, including the Velocity Nitro 4, as well as training gear supported quarterly revenue and allowed the company to exceed analysts' forecasts, Bloomberg writes. The company attributes the decline in revenue this year mainly to distribution optimization in North America - including lower sales through mass retail and product returns from wholesale partners as part of a revised sales mix. The company plans to partially offset this decline in 2026 through growth in Latin America, the Middle East, Africa and India.

- In 2025, the company's overall sales declined by 8.1% on a currency-adjusted basis relative to the same period in 2024, to €7.3 billion.

- Puma also reported a net loss of €336.6 million ($397.6 million) for the fourth quarter of last year, compared with a profit of €24 million a year earlier. Analysts had expected a quarterly loss of €358 million, the Wall Street Journal reported. Puma recorded an operating loss of €357.2 million for 2025 versus a profit of €548.7 million a year earlier. Analysts expected to see a loss of €374.3 million, writes Reuters.

Shares of the company at trading in Frankfurt on February 26 at the moment jumped by 6% amid investors' bets on a possible future turnaround of the business, notes Bloomberg. At the time of publication, they are trading up 2.40%. Over the past year, Puma securities have fallen by more than 20%.

After being appointed CEO of Puma in the summer of 2025, Arthur Held gave a pessimistic assessment of Puma's short-term prospects, stating that a major reboot of the business was needed. Since then, he has downsized, revamped the management team and positively assessed the prospect of China's Anta Sports Products becoming Puma's largest shareholder (Anta agreed in January to buy a 29% stake in Puma), Bloomberg notes. Previously, Held was head of sales at Adidas.

The sale of a stake in German retailer Anta Sports Products takes place against the backdrop of Puma's attempts to regain its position after losing market share to Nike and Adidas and increased competition from fast-growing brands like New Balance and Hoka, Reuters writes. The situation is complicated by weakening demand: the German brand's recent launches of new lines of sneakers, including the Speedcat model, failed to give the expected impetus to sales.

Arthur Held warned in the report that 2026 will be a transitional year for the company as Puma sells off its excess inventory through outlet stores and some wholesale partners, revises its marketing strategy and strengthens its product line in the soccer, running and training apparel and footwear categories. The moves are part of the company's plan to return to growth as early as 2027 and to strengthen Puma's competitive position in the market alongside industry giants such as Nike and Adidas, Bloomberg writes.

RBC on February 26 kept neutral recommendation on shares of Puma and left unchanged the target price for the company's securities at €20 per piece. This implies a fall in their quotations by 11.5% relative to the last closing price. "The company's outlook for 2026 can be considered cautious, although it is slightly better than market expectations," Bloomberg quoted RBC analyst Piral Dadhania as saying. He added that Puma's fourth-quarter 2025 results beat gloomy expectations thanks to the apparel segment posting a stronger-than-expected performance.

Analysts at Bernstein noted that inventory declines are coming faster than expected, which is a positive signal, Reuters wrote.

Of the 17 analysts who cover the company's stock, the majority - 12 - recommend holding it in their portfolios. Five of them advise to buy. Analysts' average target price for the company's securities is €24.4 per unit - 8% above the last closing price.

This article was AI-translated and verified by a human editor