Puma is implementing a cost savings plan after reporting lower than expected fourth-quarter sales and a drop in annual profit in its latest preliminary results.

On Wednesday, the German athletic company reported that currency adjusted sales in Q4 of 2024 grew 9.8 percent to 2.29 billion euros, while full year sales were up 4.4 percent to 8.82 billion euros and in line with outlook.

In the fourth quarter, both the operating result (EBIT) of 109 million euros, up from 94 million euros in Q4 2023 and net income of 24 million euros, up from 1 million euro from the same time last year, came in above last year’s levels, but below expectations.

The athletic company’s preliminary fourth quarter results prompted the brand’s shares to fall nearly 15 percent on Thursday.

All regions contributed to the sales growth in the fourth quarter, Puma said, which was driven by a strong improvement in the wholesale business (up 6.9 percent) and continued growth in direct-to-consumer (up 16.1 percent).

Puma added that when compared to the first nine months 2024, a stronger growth trajectory was achieved across EEMEA (up 14.3 percent), Europe (up 10.3 percent), Greater China (up 7.4 percent), other APAC (up 19.0 percent) and North America (up 2.6 percent), while LATAM’s sales growth was softer with an increase of 7.0 percent.

In Q4, Puma’s footwear business grew 9.2 percent, and apparel was up 8.8 percent, while accessories increased 14.5 percent, the company noted.

Turning to the full-year 2024, Puma noted that its operating results came in at 622 million euros, flat against last year’s level and in line with the EBIT outlook for the full year 2024. Net income for the year came in at 282 million euros, which is below prior year’s level of 305 million euros and the company’s expectations. This was mainly caused by higher net interest expenses and higher non-controlling interests, Puma said.

As a result of these earnings, Puma noted that it initiated a cost efficiency program with the objective to achieve an EBIT margin of 8.5 percent by 2027. This is set to be achieved by optimizing direct and indirect costs, including personnel expenses through better resource allocation aligned with our strategic growth areas, Puma noted.

Dubbed “nextlevel,” Puma chief executive officer Arne Freundt described the initiative as a comprehensive efficiency program targeting cost optimization and operational improvements.

“Combined with decisive actions already taken, we will implement further cost control measures in 2025,” Freundt said. “While we continue to operate in a dynamic environment, we are encouraged by our improved growth throughout 2024 and expect 2025 to grow stronger than 2024.”

The company added that its new cost efficiency initiative complements Puma’s brand elevation strategy aimed at building the foundation for sustainable and accelerated growth. In what remains a dynamic environment, Puma said it will continue to make strategic investments in its brand to accelerate growth, complemented by the “nextlevel” program.

Puma expects to report its complete fourth quarter and full-year 2024 results, and give its outlook on fiscal 2025, on March 12.