German sportswear brand Puma surprised local markets after it released preliminary second quarter results that were below expectations and then slashed its outlook for the full year.

“Amid ongoing volatile geopolitical and macroeconomic volatility, Puma anticipates that both sector-wide and company-specific challenges will continue to significantly impact performance in 2025,” the company said in a statement issued late Thursday evening.

Between April and June, Puma sales fell by 2 percent, in currency adjusted terms, to 1.94 billion euros. This meant that over the first half of 2025, the brand’s sales decreased by 1 percent, in currency adjusted terms, compared to the same period last year. So far in 2025, Puma sales have totaled 4.02 billion euros.

Puma also made deep cuts to its guidance for the rest of the year. The German brand now expects sales to drop by low double digits over the whole year and also issued a profit warning. Previously the company had been much more upbeat, predicting low growth and a positive EBIT — earnings before income and taxes — of somewhere between 445 million and 525 million euros. Now it expects a loss.

In Friday morning trading in Germany, Puma shares lost almost 20 percent in value. That comes on top of losses in March after the company’s initial profit warning, from which Puma shares have not yet recovered.

A combination of factors is to blame for the turnaround in guidance, Puma’s chief financial officer Markus Neubrand told journalists at a hastily arranged press conference to discuss the preliminary second quarter results.

Puma was not doing well at wholesale, he said, with North America in particular presenting the brand problems. That market makes up around one-fifth of Puma’s sales worldwide. Tariffs being imposed by the U.S. government under President Donald Trump were also an issue for Puma, despite the company changing sourcing to suit and bringing extra stock into the U.S. ahead of tariffs, Neubrand added.

“The impact from U.S. tariffs were previously excluded from our guidance,” Neubrand explained. “We also factored in what we’ve seen in the second quarter and the gross profit margin is also behind expectations. That combination [of factors] is the key explanation for the change.”

Puma saw the biggest drop in sales in North America: These slumped 9.1 percent, in currency adjusted terms, over the second quarter. In Puma’s home market of Europe, sales fell 3.9 percent. They dropped by the same percentage in Greater China. In the Asia Pacific region, Puma sales slipped 2.4 percent, in currency adjusted terms. The only markets to see growth were smaller ones, with Latin American sales rising 16.1 percent and Eastern Europe, the Middle East and Africa totting up a small sales boost of half a percentage point.

The company was also holding too much inventory, the Puma executive conceded, and is having issues selling at full price.

In terms of product categories, sales of Puma footwear grew 5.1 percent, in currency adjusted terms. Apparel and accessories fell by 10.7 percent and 6.4 percent, respectively.

Puma had expected to capitalize on the so-called “low profile” trend with its range of Speedcat products. Although these were doing well in fashion-forward Asian markets and in trendy metropolitan stores elsewhere, Speedcat had not resonated with customers more generally and sales “are behind expectations,” Neubrand noted.

Also present at the press conference was the company’s new chief executive officer, Arthur Hoeld, who previously spent 26 years at Puma’s much larger, local competitor Adidas.

Hoeld started the job on July 1, taking the place of Arne Freundt, who led Puma for around two-and-a-half years. Hoeld held a wide variety of roles at Adidas, including in global sales, brand strategy and regional management.

Analysts have suggested that in such difficult market circumstances, Hoeld may have wanted a “clean slate” before he initiates his own strategy, which may have been another reason for the unexpectedly drastic cut in Puma’s guidance.

Hoeld himself wouldn’t be drawn in detail on where he might take the company next.

“We need to ask ourselves some tough questions,” Hoeld told media on Friday morning. “I am aware of the disappointment … I do recognize we have some very immediate operational challenges.”

But, he added, he’d only been in the top job for three weeks and was still evaluating everything. He promised he would come back to investors, analysts and media with a more fully-formed strategy by October.

Key areas for that strategy would likely include “distribution mix, the quality of our distribution, our brand storytelling, our strength in archives and innovation,” Hoeld said. “These are the things we will investigate to bring our brand forward in the future.”

One thing Hoeld was clear on: The strategy put in place by his predecessor, which included big spending on a worldwide marketing campaign, would be discontinued.

“The future starts now,” Hoeld said, adding that he didn’t want to dwell on any past mistakes at Puma. The rest of 2025 would be a “reset” for the brand and then 2026 would be a “transitional year,” Hoeld said.

On Friday morning, market analysts from the likes of Deutsche Bank, JP Morgan and UBS expressed surprise at the new, negative guidance. Several analysts suggested that Hoeld had a tough job ahead of him. Puma was suffering from increased competition in its sector, cash flow issues and high net debt and seemed to have been slow coming to market with some trend-driven products, the analysts said.