THE GIST
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Puma's third quarter was still weak on almost every traditional measure: sales fell, the company posted an operating loss and North American demand remained poor. Investors nevertheless pushed the shares around 7% higher because revenue beat expectations, inventories dropped faster than planned and the balance sheet finally started showing evidence that management's reset is working.
The relief looks less impressive beside Adidas, which has just reported record quarterly sales and profit and raised guidance again.
WHAT HAPPENED
Puma's third-quarter sales fell 5% on a reported basis to €1.78 billion, or 6.3% in currency-adjusted terms, but still came in slightly above analyst expectations of roughly €1.75 billion (about $1.96 billion).
The company posted an operating loss of €11.4 million, compared with a €16.2 million profit a year earlier and analyst expectations for a loss of about €10 million.
That figure included a €29.8 million refund related to US tariffs and €11.7 million of one-time restructuring costs.
The number investors liked most was inventory. Stock fell 24.3% to €1.61 billion as Puma reduced purchasing and continued clearing excess product, bringing inventories below the level some analysts had expected only by year-end.
Free cash flow improved to €92 million from negative €43 million a year earlier, helped by working-capital improvements, lower tax payments and reduced investment.
Sales remained weak across Puma's biggest Western markets. EMEA fell 11.5% at constant currencies, while the Americas declined 8.1% and North America dropped 17.2%.
Asia-Pacific provided the main bright spot with double-digit growth, while direct-to-consumer revenue increased 1.2% and e-commerce rose 7.8%.
Puma kept its forecast for a low- to mid-single-digit full-year sales decline and narrowed its expected operating loss to €80 million to €130 million from a previous range of €50 million to €150 million.
WHY IT MATTERS
The share-price rise is really a bet that Puma is finally cleaning up the mistakes that created the current downturn.
Management has been deliberately reducing sales to mass merchants and other highly promotional wholesale channels because discount-heavy distribution can boost revenue in the short term while making the brand feel less desirable.
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That strategy hurts now. Wholesale revenue fell 9.6% in the quarter, but direct-to-consumer sales are becoming a larger share of the business and online growth continued even as promotions were reduced.
The falling inventory figure matters for the same reason. Too much stock forces retailers and brands into markdowns, which damages margins and trains consumers to wait for discounts. Cutting inventories by almost a quarter gives Puma a better chance of restoring full-price sales next year.
Gross margin improved by around 420 basis points to 49.5%, helped by lower sourcing costs, better channel mix, currency effects and the tariff refund. The problem is that Puma is repairing itself while Adidas is accelerating.
Adidas generated record third-quarter revenue of €7.25 billion, up 9%, while operating profit jumped 37% to a record €1.01 billion. Its operating margin reached 13.9%, direct-to-consumer sales rose 17% and the company lifted full-year operating-profit guidance to around €2.5 billion.
That gap shows why Puma's issues cannot be blamed entirely on weak sportswear demand.
Adidas is growing across football, running, training and lifestyle while Puma is deliberately shrinking parts of its distribution and trying to rebuild consumer relevance around products such as Nitro running shoes and the Speedcat.
The arrival of Anta Sports adds another strategic variable. The Chinese sportswear group completed its purchase of a 29.06% stake this month for about €1.5 billion, becoming Puma's largest shareholder and gaining representation at supervisory-board level.
Anta has deep experience operating multiple sports brands in China and could help Puma strengthen retail execution and distribution in the region, where the quarter was already strongest.
WHAT'S NEXT
The key question is whether cleaner inventories turn into genuine sales growth in 2027 rather than simply making a shrinking business more efficient. Investors will watch full-price sell-through, wholesale orders and whether running momentum can broaden beyond a handful of successful franchises.
Anta's influence will also come into focus as the companies explore ways to cooperate without compromising Puma's independent management and global brand identity.
The comparison with Adidas will remain unavoidable. Puma does not need to match its larger German rival immediately, but it eventually needs evidence that brand desirability, margins and revenue can all improve at the same time.
Friday's rally suggests investors can see the outline of a recovery. Adidas's record quarter shows how high the competitive bar has become while Puma is still rebuilding.
