I've been watching Puma for a long time - not because of short-term trends, but because of the substance behind the brand. Now, after the 50% drop in the share price since the beginning of the year (as of April 2025, price ~€22), things are getting interesting.
Because: Puma is currently valued favorably - the P/E ratio 2025e is around 13, while competitors such as Nike or Adidas sometimes have P/E ratios above 25. The price/sales ratio is only ~0.6, which in my view is an understatement of the potential for a global brand with billions in sales.
Important figures:
Turnover 2024: € 8.6 billion
Adjusted EBIT: € 622 million
EBIT margin 2024: 7.2%
Target margin by 2027: 8.5% (through the "nextlevel" efficiency program)
Net debt: manageable at ~€ 640 million, solid in relation to the balance sheet
Market capitalization: ~€ 3.2 billion
The company is currently focusing on efficiency and profitable markets. These include, among others:
Withdrawal from weaker markets (e.g. US mass market)
Expansion of the direct-to-consumer business
Focus on retro models such as "Speedcat" - with high margins and brand loyalty
Regional focus on Latin America and EMEA, where growth has recently been strongest
Why I am considering an investment:
1. turnaround character: operationally, things are not going badly - only the outlook for 2025 is cautious. But this is precisely where the opportunity lies: the poor sentiment is already priced in.
2. valuation: Historically low multiples for a sports brand with global reach.
3. brand & management: Despite challenges, Puma has a clear strategy and has been known in the past for making strong counter-cyclical returns.
Risks? Of course. The USA and China are weakening, and fashion is not a sure-fire success. But for long-term investors with patience and a sense for undervalued quality, Puma could be exciting right now.
I'm not invested yet - but I'm doing the math.
