Puma Narrows Q2 Operating Loss to €53.1 Million as Turnaround Strategy Advances

German sportswear company Puma reported a narrower operating loss for the second quarter of 2026, as cost reductions, inventory clearance and organizational restructuring began to produce measurable financial improvements.

The company posted an operating loss, or EBIT, of €53.1 million, compared with a loss of €109.1 million in the same period last year. The result came in better than market expectations as Chief Executive Officer Arthur Hoeld moves forward with a turnaround strategy aimed at restoring growth from 2027.

Quarterly sales totaled €1.69 billion, down 9.4% on a currency-adjusted basis, reflecting the company’s reset measures and softer consumer demand across key markets. Although the results broadly exceeded market expectations, Puma maintained its full-year outlook, prompting its shares to fall as much as 7% in early Frankfurt trading on July 31.

Summary

Lower One-Time Expenses and Improved Gross Margin

Puma reduced its second-quarter operating loss by €56 million from the prior-year period. The improvement came despite lower sales and reflected the company’s cost-efficiency program and a significant reduction in one-time expenses.

One-time effects declined to €11.2 million from €84.6 million a year earlier. These expenses were primarily related to personnel and consulting costs associated with the cost-efficiency program. Operating expenses, adjusted for one-time effects, decreased 4.0% to €872.6 million.

The company’s gross profit margin rose approximately 180 basis points to 48.0%, supported by lower sourcing prices, favorable currency effects and channel mix. Puma also benefited from €11.5 million in U.S. tariff refunds that reduced its cost of sales, contributing approximately 60 basis points to the overall margin improvement.

However, adjusted EBIT excluding one-time effects deteriorated to a loss of €41.9 million from a loss of €24.5 million a year earlier. The substantially higher gross margin was not enough to fully offset the impact of lower sales.

Wholesale Declines as DTC Share Rises to 35.2%

Wholesale sales declined 14.0% on a currency-adjusted basis to €1.09 billion. The decrease reflected weaker demand from retail partners in EMEA and the Americas, as well as Puma’s continued reduction of undesirable wholesale business, including its exposure to mass merchants in North America and Europe.

Direct-to-consumer sales increased slightly by 0.4% to €595.8 million. E-commerce grew 1.8%, offsetting a 0.5% decline at owned and operated retail stores. As a result, DTC accounted for 35.2% of quarterly sales, up significantly from 32.1% in the same period last year.

Regionally, currency-adjusted sales declined 12.9% in EMEA and 15.4% in the Americas. North American sales fell 16.7%, primarily due to weaker consumer demand and the reduction of undesirable mass-merchant business.

Asia-Pacific provided a bright spot, with sales increasing 8.6% to €416 million. Growth was supported by sustained demand for low-profile sneakers, particularly the Speedcat family, as well as ongoing inventory clearance.

By product division, footwear sales declined 11.7%, apparel fell 4.3% and accessories decreased 12.0%. Within footwear, however, low-profile styles maintained their momentum, while Running and Training delivered strong growth on demand for NITRO products and the rapid expansion of HYROX-related offerings.

Inventories Fall 15.3% as Free Cash Flow Strengthens

Puma also made progress in reducing the excess inventory that has remained a central component of its turnaround effort. Inventories fell 15.3% year over year to €1.82 billion at the end of June, reflecting lower purchasing volumes and continued inventory clearance.

The company expects its inventory position to normalize by the end of 2026.

Working capital declined 17.2% to €1.54 billion, while trade receivables decreased 18.9% and trade payables fell 20.8%.

Quarterly free cash flow increased significantly to €328.8 million from €94.9 million a year earlier. The improvement was driven by stronger working capital management, improved profitability and lower capital expenditures. Capital expenditures declined to €15.8 million from €53.1 million in the prior-year period.

Transitioning to a Brand-Led Organization

Hoeld spent 26 years at Adidas, where he held senior positions across brand strategy, European operations and global sales before becoming Puma’s CEO in July 2025.

Since taking the position, he has pursued a broad restructuring of the company, including reducing excess inventory, optimizing its cost base, reshaping its leadership structure and streamlining distribution.

Commenting on the quarter, Hoeld said: “Operationally, we took significant steps towards a structurally healthier business model in the second quarter by reducing inefficiencies, optimising our cost base and improving our organisational setup. Together with our brand-led approach these changes are the foundation for future growth.

After a solid first quarter and a softer second quarter in line with expectations, we expect sales to improve sequentially in the second half of 2026. This supports our confidence in the full-year trajectory, and we confirm our outlook for the full year.”

On the product side, the Speedcat Ballet and Speedcat Wedge delivered strong sell-through, while Puma continued positioning its iconic Suede sneaker for a return in the coming seasons.

The company also expanded its NITRO technology across Running, Hybrid Training and Racing, while introducing the technology into a football boot for the first time with the ULTRA 7.

Puma Maintains Full-Year Outlook

Puma continues to expect currency-adjusted sales to decline in the low- to mid-single-digit percentage range in 2026. The company forecasts an operating loss of between €50 million and €150 million and plans approximately €200 million in capital expenditures.

The outlook now incorporates the potential negative effects of the Middle East conflict on sales and profitability, alongside possible benefits from lower U.S. tariff rates and tariff refunds. Puma expects the negative and positive effects on full-year profitability to largely offset one another.

The decision to maintain, rather than raise, its guidance disappointed some investors, contributing to the decline in Puma’s shares following the results. Still, the narrower operating loss, lower inventory levels and stronger free cash flow indicate that the company is making financial progress on its restructuring.

Puma has characterized 2025 as a year of strategic reset and 2026 as a period of transition. Through its renewed focus on brand and product, the company is seeking to return to growth from 2027 and move toward its medium-term ambition of becoming one of the world’s top three sports brands.

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