Finance
Puma inventory headache highlights US tariff dilemma for retailers
Published by Global Banking & Finance Review®
Posted on July 25, 2025
3 min readLast updated: January 22, 2026
Global Banking & Finance Review®
Company
Published by Global Banking & Finance Review®
Posted on July 25, 2025
3 min readLast updated: January 22, 2026
Puma's US inventory issues highlight tariff impacts, with plans to raise prices amid declining sales and increased competition.
By Helen Reid
LONDON (Reuters) -Puma faces a dilemma in the United States: after rushing shipments from Asia to beat incoming tariffs, the German sportswear brand is now discounting to clear stock, while planning to lift prices this year to offset rising costs.
The conflicting pressures reflect a broader challenge for retailers trying to make sure U.S. shelves are stocked for the crucial back-to-school and holiday seasons and looking to hike prices even as demand is softening.
Puma, which warned of an annual loss on Thursday, said it was cutting orders and planning to raise prices in the fourth quarter to lessen the impact of tariffs, which it estimates will take 80 million euros ($93.78 million) off its annual gross profit.
"Elevated inventory levels on our balance sheet are leading to lower full price realisation," Chief Financial Officer Markus Neubrand told journalists on Friday. "In response, we've adjusted our future orders to better match expected demand."
At the end of the second quarter, Puma's inventories were up 18.3% in currency-adjusted terms compared with the previous year, hitting 2.151 billion euros, mostly driven by North America.
But North America was also Puma's weakest region over the last three months, with sales down 9.1% in currency-adjusted terms. Puma now expects global sales to fall this year by at least 10%, further heightening the inventory problem.
"The idea to front load imports into the U.S. was a sensible tactical position given uncertainty, but it does come with the risk of increased discounting in a weak market," said Adam Cochrane at Deutsche Bank Research.
Puma's plan to reduce orders should help bring inventories down, but also reflects weaker demand from retailers, Cochrane added.
Puma generates three-quarters of its revenue from wholesale, and sales through that channel fell 6.3% in the second quarter. The company does not break out U.S. figures, but the market accounts for around 20% of global sales.
"Looking specifically at the U.S., the ability to push through price increases not only appears challenging in the context of higher inventories ... but also given Puma's muted brand momentum in the region amid an increasingly competitive environment," said Felix Dennl, analyst at Metzler in Frankfurt.
Industry leader Nike raised some U.S. prices in May, while Lululemon and On have also flagged increases, as brands adapt to paying more for their imports.
"One of the key outstanding questions is how consumers will respond to the price increases, especially since the last major inflationary episode during COVID was partially cushioned by stimulus vouchers which may have dampened price sensitivity at the time," said UBS analyst Robert Krankowski.
Puma was struggling even before tariffs, with products such as the relaunched Speedcat sneaker not selling as well as expected.
CEO Arthur Hoeld, in charge since July 1, warned 2025 would be a "reset" year and 2026 a "transition", as he attempts a turnaround after predecessor Arne Freundt failed to revive sales.
Puma's balancing act is one shared by all retailers in the U.S., where memories of record inventory pile-ups in 2022 in the wake of pandemic supply chain disruptions are still fresh. The glut that triggered deep discounting and dented profits is a situation retailers are anxious to avoid repeating.
($1 = 0.8531 euros)
(Reporting by Helen Reid; Editing by Louise Heavens, Kirsten Donovan)
Puma is dealing with high inventory levels due to rushing shipments from Asia to avoid tariffs, leading to discounting to clear stock.
Puma expects global sales to decline by at least 10% this year, primarily due to weak demand and increased inventory levels.
Puma plans to cut orders and raise prices in the fourth quarter to mitigate the impact of tariffs and reduce inventory levels.
The North American market has been Puma's weakest region, with sales down 9.1% in currency-adjusted terms over the last three months.
Puma's situation reflects a common challenge among retailers in the U.S., who are still recovering from previous inventory pile-ups caused by pandemic-related disruptions.
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