Puma Aktie

Ladies and gentlemen, thank you for standing by. Welcome, and thank you for joining the Q1 2026 Earnings Call of PUMA SE. [Operator Instructions]

I would now like to turn the conference over to Manuel Bosing, Director, Investor Relations. Please go ahead.

Thank you very much, Maura. Hello, everyone, and welcome to the PUMA conference call for the first quarter. Joining me today are our CEO, Arthur Hoeld; and our CFO, Markus Neubrand.

Before we start, please take note of the cautionary statement regarding forward-looking information. Arthur and Markus will guide you through today's presentation covering our business recap, financial update and way forward. After the presentation, we will open the floor for your questions. [Operator Instructions] With that, over to you, Arthur.

Manuel, thank you very much, and welcome and good afternoon from my side as well. Before we start to get into the business topics and the updates about Q1, I, of course, want to take a moment to also reference another announcement which we made this morning.

Markus Neubrand, our CFO, has decided with the Supervisory Board to step down from his office as of today, end of the month, and will remain in the company until end of September. I would like to use the opportunity and say a sincere thank you to Markus for the support I got personally from him during my on-boarding phase at PUMA, and also for guiding not just the financial team, but the organization through what was not the easiest of times for our company. He was instrumental in terms of developing the [ RESET ] program with us, and also getting the company now into a transition mode for the years to come. So Markus, thank you very much. We'll handle the call together almost as always, [indiscernible] the last couple of quarters, and I wish you all the best for your personal future as well.

At the same time, we have announced the arrival of a new CEO, which is [ Mark Lanner ]. Mark will start with us early next month, i.e., on Monday next week. And I'm very much looking forward to welcome an industry veteran, someone that is very familiar to most of you in his new role as of early May.

With that being said, we'll now start to get into the results. And I would briefly like to touch upon the top line results. Markus will, of course, in detail, explain what you have also already seen in the announcement this morning.

So first of all, Q1 was a result that is in line with our expectations, and we would like to call this a very solid start into the year of 2026, a transition year as we called out. We've made significant progress this year already in our operating model, which is necessary to build the foundation for our future growth here at PUMA. Despite the macroeconomic and geopolitical uncertainties, we do remain confident on our track to achieve our plans for this year and beyond.

When we look at the first quarter, sales are a minus 1% versus last year currency adjusted. The decline in demand is partially offset by continued clearance of our inventory progressing ahead of our plan. Wholesale declined due to a lower demand primarily in EMEA, with DTC continued to show support, by strong outlet performance, i.e., the clearance business there, and a modest growth in e-commerce despite us continuing to have reduced promotion levels versus previous year.

The footwear division declined to continued challenges we see in the style area, but we're also very encouraged by solid development with our NITRO franchises in running and in HYROX, i.e., training. Our profitability has improved versus last year, and our EBIT stands at shy of EUR 52 million right now. Improved gross margin and a lower OpEx is certainly something which is worthwhile noting, and Markus will go into more details later on.

Let me start also by focusing what is pivotal and what is most important for a sports brand like PUMA, and that's the success of our athletes and our teams in the first quarter. We have talked about an all PUMA final at the Africa Cup of Nations in January. We've also seen an all PUMA final at European [indiscernible] Championships between Denmark and Germany. Great start to the year, which was then continued when you look at track and field with another world record, the 15th set by [indiscernible], where is now at a staggering 6 meters and 31. At the World Athletic Indoor Championship, 21 PUMA athletes [indiscernible] medals, and that was by far the best performing brand that we've seen in championship, including our Swiss [ Simon ] [indiscernible] setting a new world record in [indiscernible]. [ Amana Petros ] set a new German record in the Half Marathon in Berlin, again, underlining the great achievements and the great potential that the NITRO technology has for us as a brand.

Ferrari has seen 3 consecutive podium finishes in the first 3 races of the new Formula 1 season, and [ Joanna Witzek ] has set a new world record in the HYROX women's racing in Warsaw only recently. Finally, a quick look at football, which is, of course, pivotal this year. Man City took the [ Carabao Cup ] against [indiscernible] a few weeks ago. And as you've also noticed, we have advanced VFA Cup final and are at the moment, leaders off the table in the premiership. So all in all, a great start to the year, a great sporting start for PUMA as a brand.

But at the same time, we can also record that our recent product launches have really achieved and in some instance, even overachieved our best hopes. We have 11 teams qualified for the FIFA World Cup in North America in a couple of weeks' time. We've launched those kits with the so-called [ Rolling Nations ] event in New York just a few weeks ago, and more than 10,000 visitors live for that event. From an HYROX perspective, we are very, very pleased that we've been the first one to market that has launched a specifically developed product around the event in Las Vegas, and product has been sold out, but will, of course, get restocked in the very near future.

We've seen continued great results with our NITRO technology here with the launch of the [indiscernible] NITRO [indiscernible] at [ Zalando Marathon ], but also being displayed in Boston recently. [ Matthias Gitzel ] has launched its very own first handball shoe and also here a sellout result, which was unprecedented for us in that area.

There was a lot of great news from a sports perspective, but also from a style perspective. When you look at our street culture, we're very intrigued by the continued success we have with low profile. In this case, the launch of 8 Street, a campaign was featuring the PUMA [indiscernible] and K-pop artist, [indiscernible]. And at the same time, we're looking ahead into the future where we are revitalizing SUEDE, a key iconic footwear piece for PUMA in the future with different activations, including our House of SUEDE at the Paris Fashion Week.

So there's a lot of things which have happened, which give us confidence that we are on the right track. But everything, of course, is framed within the 3-year program that we have outlined to all of you at the middle of last year. Our transformation started with a reset in 2025 and is now in execution mode in 2026, a year of transition. And at this point in time, I would just like to briefly recap again our objectives for 2026 that do remain unchanged.

It is, on the one hand, a continuation of a 3-year transformation journey that our company and our brand will undergo. We will definitely accelerate PUMA's brand momentum, and that brand momentum will fuel future commercial success. It is very key that we continue to remind ourselves that commercial success will follow brand success, and that's exactly the order in which we're working towards. That also means we're going to shift towards a higher quality revenue with an improved focus on profitability, including better placements in our retail environment and with our customer collaborations. We will continue to work on our financial discipline and will deliver reliable results in the quarters and in the future. All will be underpinned by us building a high-performing team around the world and some key efforts, not just from a structural perspective, have already been taken in 2025.

When you look at the continued execution of our rightsizing efforts, there are a few which are worth mentioning. We have a continued focus to elevate our distribution quality, particularly in key markets like North America. As previously shared, our mass merchant business in the U.S. will see a steep double-digit decline until end of this year, and the work has started already. In a moment, I'll also elaborate on the [ takeback ] of overstock at wholesale partners where we've made some significant progress.

In our very own channels, we have significantly reduced level of discounts and will further decline, will however, always remain on industry standards. Our industry does see significant promotional activities and PUMA will, of course, at key moments, key commercial moments be on par with our competition to also make sure we liquidate our inventories. We'll see continued efforts to improve our cash management. We've made an immediate reduction of our purchase orders, and these are fully implemented already for the fall/winter '26 season. We have a dedicated work stream in place to analyze our account receivables, and we have put tangible actions in place to optimize those.

We are equally continually focused on our cost base for short-term tactical cost reallocations, which will be part of the ongoing transition, but equally, and I'll show you a detail of that one, with the full [indiscernible] of our range size and the complexity in our organization. And finally, a continued assessment of our operational efficiencies in line with the ongoing efforts to improve PUMA's operating model. To name here is our reorganization of our home market in Europe, which is in full swing and has been communicated to all affected teams in the first quarter already.

Looking at specific examples, here is our progress on the continued rightsizing efforts. We talked about the overstock reduction at wholesale partners, and I can report that we have in North America achieved a mid-double-digit decline of inventory levels at selected wholesalers. I will call it a very solid progress in the first quarter of 2026 to also liquidate our excess inventory. The target for us remains that we normalize to healthy levels, and they're rebuilding as a stable business with our strategic partners based on the better segmentation, consumer activation and also life cycle management.

Last year, we have announced that we're going to rightsize also our range size and the complexity that comes with it. Historically, PUMA has had a fairly complex and specifically for the size of our organization, partly inefficient range. We have immediately reviewed starting in July and August last year, and we've taken decisive actions, which already impact and affect Spring/Summer '27 as a collection. Significant progress has been made by the teams to increase the efficiency of the range and to also normalize our SKU content to a healthy level for the size of our PUMA business.

It's worth mentioning here that our storytelling product and distribution approach, which we have concerted and aligned together have really led to a better point of view as a brand, and ultimately will allow us to have a more succinct brand identity, both in terms of the customer presentation, but also in terms of how we energize our consumers around the brand again. And then finally, we have an ongoing reduction of our corporate positions by 20% from the end of '26 versus the beginning of 2025, so in the span over 24 months. As a reminder, 500 positions have been successfully reduced in the first half in '25 as part of the Next Level Cost Efficiency Program. Middle of last year, we then identified another 900 positions to be reduced until the end of this year. And here is the status of where we are with the execution of that program.

50%, i.e., 450 positions were already identified, communicated and executed, i.e., the effective employees have already left the organization latest by the end of Q1. Out of the remaining 50%, that's another 450 positions, 80% were already identified and communicated with the departure of the affected employees ongoing. So it's only 20% remaining, and they are entirely identified with communication in different stages depending on the local requirements and processes that we, of course, adhere to.

And then last but not least, it's also worthwhile mentioning that we continue the leadership changes in our senior lineup. We have briefly mentioned the switch from Markus to Mark from a CEO -- a CFO positioning. But underneath also, we continue to have adjustments in our leadership organization. Four new additions have been communicated recently. Emily [indiscernible] will return to PUMA and will start her duties as Vice President of the business unit Kids under Maria's leadership. Also in Maria's team, we have recently announced and appointed a new Vice President of Creative Direction. Creative Direction for us is pivotal for the turnaround of the PUMA brand, to strengthen our brand identity and really to discuss a next level [indiscernible] creation to product execution perspective. James has vast industry experience between innovation and product excellence, and it's really exciting to see him on board now.

Two further leaders have been announced. Starting with Maria's organization, [ Laurent Flicker ], will start in June to take up the position of VP, [ BU Style ]. And in that capacity, he will be overseeing our [ Select, now Prime ] business. That's a business which we last year separated from our core business to make sure we're going to have really a different and a prosperous business in that pivotal area also from a commercial perspective.

Last but not least, moving to commerce. [ Bertrand Blanc ] will take up the position of Vice President, Wholesale in Matthias' team starting next Monday already, and his key missions to ensure that we are rebuilding a healthy and sustainable business with key strategic partners across our markets. Finally, we are also in the final stages of closing our hiring for a new VP of e-commerce, who would then complete the lineup in Matthias Center of Excellence across all channels.

That's it for me from now, and I would like now to hand over to Markus. Thank you.

Thank you, Arthur, and hello to everyone also from my side. Following Arthur's business recap, I will now walk you through the key financial metrics for PUMA's first quarter, highlighting the impact of the rightsizing efforts Arthur outlined on our financials.

We began our transition year 2026 with a solid first quarter. On sales, we saw a decrease of 1% currency adjusted, which is a notable improvement from the previous 2 quarters. Sales development was influenced by both reset activities and clearance. On one hand, we continue to see a negative impact on sales from our reset measures, which included reduction of undesirable business and lower promotions in our full price stores and e-commerce. On the other hand, we saw positive effect from clearance of elevated inventories. The clearance was executed through selected wholesale partners and our own factory outlets. Overall, without the negative impact from reset initiatives and the positive effect from clearance, we recorded an underlying decline in sales in the low to mid-single digits. We expect that both clearance and [ RESET ] impact will continue but further decrease throughout the year.

Now let's look at the sales breakdown by channel. Wholesale decreased by 2.8%, mainly due to a lower demand from wholesale partners in EMEA. Direct-to-consumer sales grew by 3.8%, driven primarily by a 5.7% rise in owned and operated retail store sales, which mainly resulted from inventory clearance in our outlets. E-commerce also saw a 0.6% uptick, supported by new APAC marketplaces and reduced promotional activity. Overall, the D2C share increased to 28.3% from 27.5% last year.

Looking at our regional performance in the first quarter. EMEA sales declined by around 10% currency adjusted. This was broadly driven by weaker underlying demand in the region and due to our reduction of undesirable wholesale business. In addition, sales in the Middle East, which attributes less than 2% of our sales were impacted by the ongoing regional conflict. The Americas delivered currency-adjusted growth of around 6% with double-digit growth in Latin America, supported by improving underlying demand and 2% growth in North America. Inventory clearance supported sales development in both regions, especially in the U.S. market, where it offset the lower mass merchant business.

Sales in Asia Pacific increased by around 8% currency adjusted, driven primarily by strong D2C performance across both owned and operated stores and e-commerce. On the product side, we continue to see strong demand for low profile and especially the Speedcat family. Greater China grew 9% on the back of a strong Chinese New Year performance and the rest of Asia Pacific increased by around 7%, reflecting strong D2C momentum in Southeast Asia.

Turning to performance by product division in the first quarter. Footwear sales declined 2.3%. Within footwear, running and training continued to show strong momentum, supported by NITRO styles and the rapid expansion of HYROX-related products, which partially offset declines in other categories. Apparel sales increased 0.9%, driven primarily by training and golf categories. Football also delivered a solid performance, supported by strong demand for Federation kits ahead of the FIFA World Cup. Accessories sales up 0.3%, mainly supported by the golf category.

Let me now walk you through our operating performance in the first quarter. As mentioned earlier, sales are down [indiscernible] currency adjusted with a reported decline of 6.3% due to FX headwinds, especially in U.S. dollar, Turkish lira and Argentine peso. Gross profit margin improved by 60 basis points to 47.7%, which I will elaborate a bit more in just a minute. Royalty and commission income increased by 13%, mainly reflecting a stronger Formula 1 business, supported by an additional raise compared to the prior year.

Operating expenses, excluding onetime effects, decreased by 5.5% to EUR 848 million. I will come to more details in a later slide as well. Driven by higher gross profit margin and lower [indiscernible] operating expenses, adjusted EBIT increased to around EUR 64 million, up 5% year-on-year. Onetime effects were down year-over-year and amounted to EUR 12.6 million, mainly related to personnel expenses connected to the cost efficiency program. EBIT, therefore, came in at around EUR 52 million, up almost 20% year-on-year.

Financial results at around minus negative EUR 60 million improved significantly. This was mainly due to favorable currency movements, particularly U.S. dollar and Mexican peso, which more than offset the slight increase of interest expenses on bank debt. Income taxes increased to around EUR 10 million, driven by higher earnings before tax. Consequently, profit from continued operations came in at EUR 26.5 million, a significant improvement compared to Q1 2025.

Let me now explain the development of our gross profit margin in the first quarter. Overall, gross profit margin increased 60 basis points to [ 47.7 ]. The most significant driver you see here is promotions and inventory reserves. While promotions had a negative impact on gross profit margin, the reversal of inventory reserves recorded in the second half of 2025 contributed to a significant positive impact. In addition, we recorded lower freight costs compared to the higher base in Q1 2025. A more favorable channel mix, reflecting a higher share of direct-to-consumer also supported the margin development. These positive effects were partly offset by product mix and regional mix as well as currency effects, which weighed on the margin compared to last year.

Now moving over to our operating expenses, which fell 5.5% to EUR 848 million, excluding onetime effects. The reduction was driven by savings from the cost efficiency program and lower marketing expenses. Marketing decreased compared to high levels in Q1 2025. This was based on phasing effects and not a structural reduction as we continue to invest in brand and growth opportunities. Together with favorable currency movements, these factors offset the higher cost and channel mix due to the mentioned increase of the D2C share, and increase in other OpEx costs.

Let me now walk you through the development of our EBIT margin in the first quarter. EBIT margin improved from 2.2% in Q1 2025 to 2.8% in Q1 2026. The main positive driver was the increase in gross profit margin by 60 basis points, as mentioned before. Royalty and commission income also contributed 20 basis points, driven by a stronger Formula 1 business. Although OpEx fell in absolute terms, OpEx ratio increased by 40 basis points since costs did not decrease as sharply as sales. Onetime effects, on the other hand, contributed a 20 basis point increase to the EBIT margin, as these effects declined compared to the previous year.

Let us now take a closer look at working capital. Inventories declined by around 9% to EUR 1.9 billion, mainly driven by lower purchasing volumes in line with the expected lower sales base for the year and inventory clearance. Trade receivables decreased by around 20% to EUR 1.2 billion, mainly due to lower sales levels. Trade payables were down around 26% to around EUR 1 billion, also reflecting reduced purchasing volumes in the quarter. Overall, working capital decreased by almost 10% year-over-year to EUR 1.8 billion, reflecting continued progress on inventory cleanup and disciplined purchasing, and evidencing overall improved working capital management.

Looking specifically at inventory development. Inventory levels continued to decline in the first quarter and are slightly ahead of plan, supported by lower purchasing volumes and ongoing clearance activities. As communicated previously, we expect inventories to normalize by the end of 2026. assuming disciplined purchasing and continued execution of our clearance plans.

Turning to free cash flow. Free cash flow was reported at minus EUR 201 million for the end of Q1, consistent with the typical seasonal pattern in our business, free cash flow remained negative in the first quarter. However, it demonstrates a notable improvement over the previous year. This year-over-year improvement was mainly driven by more efficient working capital management, including inventory clearance and lower and more prudent purchasing volume, as we discussed earlier, higher earnings before taxes, lower capital expenditures, while we continued our investment focusing on D2C channel to enhance our long-term competitiveness. As said during our full year 2025 presentation in February, we expect free cash flow to be positive in 2026.

Finally, let me comment on net debt development. Net debt increased seasonally to EUR 1.3 billion, up year-over-year from around EUR 1 billion at the end of Q1 2025. This increase mainly reflected higher bank liabilities supporting the operating business and financing working capital. Cash position stood at EUR 326 million, up around 15% year-over-year. In addition, we had unutilized credit lines of around EUR 800 million, resulting in total financial headroom of around EUR 1.1 billion. This means that we maintained sufficient financial headroom to support the transformation journey and strategic investments. Given the currently elevated level of net debt, deleveraging is a clear priority, and we target to reduce net debt over the coming years.

Before I hand back to Arthur, as he mentioned earlier, this will be my last earnings call as CFO of PUMA. It has been a privilege working with the team through the transformation journey, and PUMA is well on track.

With that, I will now hand back to Arthur for the way forward.

Thank you very much again. Let me now turn to our outlook for the full year 2025. We will be building on the momentum from a very solid start to the new year, and we are going to reiterate our full year outlook. It is important to highlight that our outlook does not reflect potential implications from the ongoing conflict in the Middle East, or the U.S. Supreme Court decisions on U.S. tariffs.

In the Middle East, our priority has been the well-being of our staff, ensuring their safety remains of paramount focus for us. From a business perspective, direct exposure to the region is relatively limited with sales accounting for less than 2% of the total group revenues. On the risk side, we do see 2 layers, however. At this point, the impact on sales and supply chain is manageable, and we have prepared for different scenarios. The greater uncertainty, however, lies in broader consumer sentiment in response to the evolving economic and geopolitical environment globally.

On tariffs, following the Supreme Court ruling, overall U.S. tariffs have come down. That said, visibility on refunds is still limited and the situation may shift quickly again. For our top line, for full year '26, we expect a currency-adjusted sales decline in the low to mid-single-digit percentage range. We are expecting that our second half in 2026 will be stronger than our first half. And additionally, sales growth in the second quarter of '26 is anticipated to be clearly below the first quarter.

With regards to our sales channels, we do anticipate a decrease in wholesales, while our direct-to-consumer business is expected to maintain growth. We anticipate a substantial improvement in gross profit margin, while OpEx are not expected to materially lower in absolute terms as we do continue to invest in strengthening our DTC channels, as Markus has already referred to. Our EBIT is forecast to range between minus EUR 50 million to minus EUR 150 million. This includes one-off effects, which are projected to be significantly lower compared to last year '25. CapEx is expected to come in at around EUR 200 million and will focus mainly on our digital infrastructure and the investments in our DTC channels.

Looking forward, again, of course, I would like to bring it back to sports, and the sports company that we are. Well anticipated is the FIFA World Cup with 11 PUMA teams competing. It's the best representation this brand has since 2006, where at the time, a PUMA team was lifting the trophy. From a HYROX perspective, there are several high-profile events coming up, most notably the largest event to date in New York with more than 50,000 participants and the World Cup in Stockholm, where the HYROX World Championship will take place again with significant amount of PUMA product being competing and the events. And last but not least, Formula 1 will return to Miami after a break with many, many other exciting races coming up where we definitely see the potential of PUMA as a brand that is well established in the Formula 1 in the motorsports scene, which seems to have a growing dynamic with consumers worldwide.

I would also like to reiterate and repeat again that for our brand, our North Star remains to become a top 3 sports brand in the future again. We are committed to return to above-industry growth and equally committed to return to healthy profits in '27 and beyond. At this point in time, I would like to thank all shareholders, partners and first and foremost, all employees in joining us on that journey.

To wrap it up, there are 3 major messages for the first quarter in '26. Our financial results came in as expected, both from a sales and from a profitability perspective, as we've outlined. We are well on our transformation journey. We are progressing as planned with a solid start into a transition year 2026. And for the full year, our outlook is confirmed and we remain committed to achieving our plans as outlined.

With that, I would like to hand it back to Manuel. Thank you.

Thank you, Arthur. Thank you, Markus. We are now ready to start the Q&A session. Operator, please open the lines for questions.

[Operator Instructions] First question comes from the line of Will Wood from Bernernstein.

The first question, I'm trying to understand the phasing of your sales throughout the year. You maintained the, kind of, guidance of low to mid-single-digit decline, but obviously, Q1 was much better at negative 1%, and you said that you expect improvement throughout the year. Can you give any commentary on how Q2 is going? And how much of the Q1 performance was driven by the boost of clearing inventory versus the underlying growth in the business?

And then the second question is on, obviously, as we move into H2 and 2027, I appreciate it's still early days, but it's -- I think the focus will shift from resetting the brand and the transition year to rebuilding the brand heat into 2027. How are you feeling about the product pipeline into 2027 at the moment? Are you happy with the spring/summer range, et cetera? And any commentary there?

Thank you, for your questions. I will start answering the first one and then hand over to Arthur.

Regarding the cadence of the revenue growth by quarter throughout 2026. as Arthur outlined, I think on the way forward, we expect the second half of 2026 to be stronger than the first half of 2026. Therefore, it's fair to assume that the top line development in the second quarter will be more muted compared to Q1. We expect Q2 to expect it to come in clearly below the Q1 results in terms of sales growth.

Talking about and I think then also part of your question that you want to understand regarding Q1 development. The inventory clearance, as outlined also in our prepared remarks in Q1 had a positive impact on our sales growth and the positive impact on the inventory clearance was more pronounced than the negative impact from the [indiscernible] activities relating to the cleanup of distribution and desirable business and reduced promotional level.

And to your second question, Will, in terms of rebuilding brand heat and our perspective on the range on spring/summer '27, I do believe we are making progress there. We're making progress in terms of building on our strength, which is definitely the NITRO platform across running and training. Specifically, we will launch new products in both areas, and we have received pretty positive feedback in the same vein as for our new football boots collection.

Where we do see progress as well, but where, of course, the work is still ahead of us is in the style and the lifestyle area, where we see continued success, and we believe continued success from a low-profile perspective also into '27, but our efforts are clearly now around making the set a more iconic proposition in '27 with brand activities starting in '26 again and then also further dimensioning our offer with lifestyle running as one of the key future pillars. These efforts have started to be built into spring/summer '27, but they will be by no means complete yet from a product nor from a marketing activation perspective. Thank you.

The next question comes from the line of Thierry Cota from Bank of America.

Two questions from me. First, on the OpEx, they were down 5.5% in Q1. I was wondering whether you could give us the drop at constant currency and if you think that, that around 5% drop is a good estimate for the whole year?

And secondly, on the balance sheet, I think you've said that you wanted to have a clean inventory at the end of the year. I was wondering what that means in terms of percentage of sales is around 23%, which I think was the level in '24, a good level. Do you think you can reach that? And the working capital, likewise, do you think could drop back by the end of the year to the mid-teens, please?

Thank you, Thierry, for your two questions. Let me start with the second part first regarding the inventory development.

As mentioned during my prepared remarks, we firmly committed to normalize our inventories by the end of this year. If we look at the inventory as a percentage of sales, it is expected to further come down over the following quarters to more normalized levels, below 25% of sales until the end of the year. The decline will be driven by inventory clearance and adjusted purchasing volume as we outlined, I think [indiscernible] earlier. As for -- in my prepared remarks.

The first question, when talking about the OpEx development, as mentioned also in my prepared remarks, FX was a positive, [indiscernible] contributor and I think then also to the overall OpEx decrease. But also on a currency adjusted on a constant currency basis, our OpEx decreased also in Q1. I think please understand, I think we're not disclosing, I think, that level of detail. For the full year and what that means in terms of OpEx development here, I need to go back to the statement also Arthur made a our outlook where we -- I think that also for the OpEx overall will not be materially lower. And I think then also compared to 2025 as we continue also to invest into our D2C business and into our brand.

The next question comes from Monique Pollard from Citi.

What I first wanted to understand is you talked in the release about the strong demand for low profile and Speedcat in China, and you referred to in the questions above the benefits you're seeing from low profile and how that can be a driver for success into 2027. Just wondered if you could highlight for us any other markets where you're seeing meaningful demand for low profile? I guess the tie-up with [indiscernible] that you're seeing good benefits in some other pockets of Asia and whether there are any other markets?

And then the second question was on the Americas growth. So strong growth, up 6.1% and Latin America, in particular, very strong in the period, up 10.5%. Just wondered if there's anything that's driving that growth that you can call out outside of obviously the clearance activity that you've talked to?

So let me start with the low-profile answer to your question. We do see significant traction of the business continuously in pretty much all Asian markets, that is Korea, that is Japan, but specifically Southeast Asia, where we have restocking activity at this point in time going on.

However, also on the other side of the globe, in North America, we do see customers, primarily customers which are more style focused and have a stronger women's basis. We do significant results to the tune that PUMA at this point in time with some retailers is the #2 brand from a sellout perspective. So we definitely recognize a continued continuation of the trend of low profile where only very few brands are playing. But it also it is worthwhile noting that our reset activities last year are definitely paying off now. So by rightsizing the market, rightsizing the volumes that are out there, we are extending and prolonging the life cycle of these silhouettes, which are very much the benefit of our product range and our product offer.

When you then talk about the Americas, I think it's two different answers I would like to give you. In Latin America, both from a brand but also a distribution perspective, we have been well positioned over the years. The job the team has done there, the cleanliness of the market distribution and the power of presenting our brand, our product propositions has historically already been very good, and we're now, of course, continuing to harvest the fruits.

In North America, I think it's worthwhile mentioning that some of the reset activities, of course, have led to a significant impact from a wholesale perspective. But as I said, there are pockets of growth also with partners over there. And then our DTC business is, of course, also benefiting from inventories that we're liquidating for our factory outlets and a decent business in our own e-commerce channel despite promotional reductions.

The next question comes from the line of Piral Dadhania from RBC.

My first one just relates to Nitro as a product platform. I think you talked, Arthur, around some of your plans on the lifestyle side for the remainder of '26 and '27 in response to previous questions. Could you just help us understand what the plan is in relation to commercialization of NITRO, both in running and also using it in other footwear styles and subcategories?

And then my second question is one which you may or may not be able to answer, and it just relates to any update in terms of the [indiscernible] acquisition of minority stake in PUMA. Have you got any visibility on the timing of when that deal may close?

Thank you, Piral. Let me start with the second question because the answer is rather short. There are no news versus what we announced earlier in the year. We are awaiting the closure of the transaction, and that timing remains to be seen. So no further news to share on that topic.

From a NITRO perspective, the NITRO platform will be relevant across most performance categories in PUMA. That means we are not only having products available in the running segment, well known, but also our latest HYROX proposition is fully based on a NITRO platform. The specific indoor handball shoe that we've launched in collaboration with [ Matthias Gitzel ], the world's best player in this field was also based on a NITRO technology and NITRO platform. So NITRO is more than just a running platform. It will really be the major footwear technology that we are promoting across all different performance segments when it comes to '26 and 2027.

Next question comes from the line of Adam Cochrane from Deutsche Bank.

Two questions, if I may. The first one is in terms of the lead time on your new product purchases when you're talking about your new ranges for spring/summer '27. Given the input cost inflation that we're hearing about because of oil prices, when do you actually have to start ordering this product, the suppliers? And are you hearing anything on potential cost inflation on those future ranges?

And the second question is, can you just give us an idea of how far you are through in terms of the clearance activity just as a way that we can try and benchmark, is it 25% of the way through, 50% at the end of the first quarter? And on that regard, there's quite a big gross margin gain from the inventory provision reversal. Is that something that might happen again in future quarters? Or is that just something that is as you sell the product? Or do you just revalue the inventory as at the end of the first quarter?

Thank you for your questions. Let me first answer the second part, I think, regarding the clearance progress of the inventories.

As we mentioned, I think we are slightly ahead of plan, made good progress in Q1 with the reduction of our inventories and with the clearance, I think which also resulted in the decrease of the inventories, I think since we peaked, if you look at the chart in the middle of 2025. With the targeted clearance also through selective wholesale partners and our factory outlets, we, of course, also then recognize also then need to revalue our inventories, which leads also to inventory reserves.

On the other side, as we also outlined the gross profit margins, you've seen also that our promotions, I think that also in wholesale have been more pronounced, I think which you can see. I think that, of course, as the mechanism, I think as we're working through the target reduction. This process will continue throughout 2026. I think as we are firmly committed to normalize the inventories until the end of the year. When we provided also the guidance for the full year, we outlined that we expect the gross profit margin to improve. And one of the key drivers, I think that also the substantial improvement of the gross profit margin in 2026 will be driven by lower promotions, but also, of course, with the targeted reduction of that excess inventory, which will also the reverse of inventory reserves, I think will contribute to that gross profit margin development.

Then coming to your first question related to the Middle East crisis and the oil price driven, I think, then increase of the input costs. If we look at, first, let me start for autumn/winter '26, all of the orders, I think until end of autumn 2026 have been placed. And I think we see no cost inflation on our product costs. For spring/summer '27, I think that's where we know and I think as in the early stages. So that's where we start to present I think and to take orders now within the next months from our accounts. And now as we speak, we are in discussions with our vendors. And we see selective, I think then also increases in the product cost, but not material in spring/summer '27. And Autumn/Winter '27, of course, is still too early to see, nothing that, of course, how the situation overall evolves.

The next question comes from the line of Andreas Riemann from ODDO BHF.

First one to Arthur on SKU reduction. So by how much did you reduce SKUs? And would you say that you going forward plan to sell a global product to all markets? Or is part of your offer still a local product that reflects local preferences? That would be the first question.

The second one for Markus. The financial result improved actually materially and you speak about currency benefits. So have you changed your hedging strategy? And is that sustainable? Or was Q1 rather a one-off? This is the second question.

Thank you very much, Andreas. So to start with the first question in terms of range size reduction, we have reduced our range size by a significant mid-double digit. So the process between spring/summer '25 and now spring/summer '28, the collection that we're at the moment developing has been significant, and we are committed to also then executing that. What this means, of course, there will be a more significant global footprint from PUMA, i.e., also more mandatory part of the collection that we would like to see in each and every market. That's also part of our life cycle management across both style, but also the performance areas.

What that does not mean, however, is that we're reducing or even abolishing our policy to offer locally relevant products. We continue to have regional creation centers in Asia and North America, and India to make sure we're going to cater for the needs of the local consumer to complement and to complete the range offer. So it will be a mix and a blend between a stronger global offer, a stronger global life cycle management and the additions, the well-needed additions in order to cater for demand from a local perspective.

Thank you, Andreas, for your question on the financial results. Yes, a significant improvement, as outlined year-over-year in the Q1 of 2026. Let me first start with the -- also what I mentioned in prepared remarks.

Our interest expenses on bank debt has been slightly increasing, of course, given the elevated levels and higher levels of bank financing compared year-over-year. The biggest factor, and I think that I also outlined in the prepared remarks, is driven by positive favorable currency movements. And here, particularly the U.S. dollar and Mexican peso had a positive impact, I think also on -- I think then also our financial results. I think that means from a translation, but also valuation of derivatives, I think that impact our financial results. So given the nature also of FX, of course, developments, I think where it would be rather prudent not to I think continue to project, I think, such favorable currency movements for the quarters to come.

The next question comes from the line of Warwick Okines from BNP Paribas.

Just a couple of trying to understand the shape of the year, please. So firstly, just back on the Q2 sales comments you made. Is the main reason for the lower or the bigger sales decline in Q2 compared with Q1? Is the main factor here less promotional support? Or are there other factors? Because presumably, the drag from the reset is moderating?

And then the second question is just if you could comment a little bit more about the EBIT shape for the year. It's helpful for you to have commented about inventory reversals continuing for the rest of the year. But maybe just to comment on how you see the phasing of your EBIT losses through the next 3 quarters.

Thank you very much for your questions. Q2, and I think as I mentioned earlier, is expected from a sales growth perspective to come in clearly below Q1. And the key reason is the impact of the reset and here specifically the reduction of the undesirable business, I think which is more pronounced in the second quarter compared to what we expect, I think, then also what we've seen in Q1. The clearance, I think, as I mentioned earlier, of the excess inventories, of course, continues throughout the year.

Coming to the second part of your question, of course, now from a sales perspective, also what does it mean also from an EBIT development for the remainder of 2026. It is fair to say that we started 2026 clearly on a positive note from an EBIT perspective. There's still a lot of moving parts for the remaining of the year, including, of course, the top line development, as I just outlined, but as well also the level of onetime costs as we will make sure to set the right foundation in 2026 to return to growth in 2027.

If we then also look at the geopolitical and macroeconomic uncertainties that we -- especially with the Iran conflict that we see, and the tariffs. The Iran conflict, the negative impact is expected on sales and margin and even more importantly, on consumer sentiment. Tariffs as of now, there will be a positive impact on margin, but to which extent is still unclear and can, as we know, change on a daily basis. Therefore, we confirm our reported EBIT guidance for full year 2026 to be within the range -- guided range of minus EUR 50 million to minus EUR 150 million.

[Operator Instructions] The next question comes from the line of Jurgen Kolb from Kepler Cheuvreux.

Probably also welcome back, Mark. I guess you're listening in, so welcome back to the market. On the two questions, first of all, on the run shoe business, I think you mentioned that the running shoes, the NITRO foam is selling strong and is quite successful. Maybe you could talk a little bit about your progress on getting the shoes into the specialty store chain? And in which markets are you actually seeing the strong sell-through or a marked improvement?

Secondly, on current trends, I guess you indicated the Middle East conflict, obviously, the main or the difficult to forecast effect is from the consumer behavior. Have you noticed any underlying trend changes from the consumer? I know it's probably difficult for you because there is so much going on in your stores and with the wholesaler in terms of clearing inventories and what have you. But in terms of any observations that you have could be quite interesting to note if there's anything currently going on?

Thank you very much for the question. So when you talk about the specialists, what we have embarked upon last year is that specifically in Europe and in North America, we have drastically ramped up our specialist sales force. That means specialists PUMA people who visit running accounts who will be then promoting the PUMA brand, but also our NITRO technology. Only in Paris this weekend, we had 110 specialty accounts from all over the globe, spending 2 days with us, getting excited about our collections, but also giving us feedback in terms of where they see our efforts. That's primarily where we see growth happening, but equal spilling over into the mainstream accounts that would be in Europe and Intersport and others basically. So that's what we project in '26 and in '27, then the major part of the growth to be coming from. We don't have any specific region where NITRO is either overexposed or underperforming. We do see this as a global development for us actually.

And when you talk about underlying consumer sentiment, it is difficult to, of course, project where the market is going and consumer sentiment is on the one hand, driven by significant inventory and promotional activities again. We, of course, also do see that there is energy in the market -- there is energy in the market, both in Europe and U.S. in terms of consumers continuously seeking the sporting goods industry and seeking out sneakers. From our very own perspective, we are very much focusing on the major areas that we've discussed earlier to improve both our brand trajectory, but also our product offer simply based on the effect that despite any economic headwinds, or despite industry dynamics, we see significant headroom for PUMA to grow versus competition from our current perspective.

And just one very, very quick update on an add-on question. Your contracts with the container shipping companies and the freight contracts there, when does it end? And are you already in negotiations for the next contract?

Jurgen, good question, and I'll take that one. The contract, I think that we have, I think, with our carriers on the inbound side runs until the end of June of this year. And yes, as we currently speak, I think that's where we're already in advanced negotiations with our partners on the inbound transportation side.

I assume costs are not going up?

I think looking at what is currently, and I think if you look at the market, with the oil prices and you know and I think how the mechanisms are in those contracts, there are surcharges. And I think that also what we've seen, I think, since the start of the Middle East crisis, also that there have been bunker and fuel surcharges being raised. So that's actually where we see, of course, also then an impact also from the Middle East crisis, I think then also to come through. But as Arthur mentioned, overall, I think that also we have plans in place. I think looking at our supply chain, I think then also and evaluating different scenarios how to mitigate these impacts.

There are no further questions at this time. I hand back to Manuel Bosing for closing comments.

Thank you very much, Laura, and thanks to everyone for your questions. We appreciate your interest in PUMA. We stay in touch, and we look forward to speaking with you again soon. This concludes our call for Q1 2026. Thank you, everyone, and goodbye.

Ladies and gentlemen, the conference has now concluded, and you may disconnect your telephone. Thank you for joining, and have a pleasant day. Goodbye.

Ladies and gentlemen, thank you for standing by. Welcome, and thank you for joining the Q4 and Full Year 2025 Earnings Call of PUMA SE. [Operator Instructions] I would now like to turn the conference over to Manuel Bosing, Director, Investor Relations. Please go ahead.

Thank you very much, [ Maura ]. Hello, everyone, and welcome to the PUMA Conference Call for the Fourth Quarter and Full Year 2025. Joining me today are our CEO, Arthur Hoeld; and our CFO, Markus Neubrand. Before we start, please take note of the cautionary statement regarding forward-looking information. Arthur and Markus will guide you through today's presentation covering our business recap, financial update and outlook for the year ahead. After the presentation, we will open the floor for your questions. [Operator Instructions]. We will begin with a short video and afterwards, Arthur will take over. With that, please enjoy the video.

[Presentation]

Good afternoon, and welcome from my side here from [ Herzogenaurach as well ]. Yes, I think that video summarized perfectly what a great brand we are, what a great potential we have, but it certainly also highlighted some of the challenges that we have started to take last year. So allow me to take you on that journey and the progress that we have made over the last few months. However, starting, of course, when we talk about PUMA, we want to start with sports, the foundation that we build upon. Some of the highlights last year were definitely Mondo Duplantis taking the world title and at the same time, the world record in pole vaulting at the Tokyo World Championships that also made him the fourth time the Men's Athlete of the Year.

Amanal Petros, featuring the Fast-R 3, was winning the silver medal in the marathon race. And then subsequent to that, in Valencia, set the third-fastest European time ever. We are very happy that to date, we have 10 teams qualified for the FIFA World Cup, and that gives us strong, strong presence at one of the most prolific sporting events later this year. HYROX, key partnership that we have extended last year sees increasing popularity, building a community way beyond what we have imagined beforehand, and we have key athletes who are breaking world records almost on a weekly basis. In Formula 1, last year, we had 2 out of 5 teams in the top constructor championships. And as you've seen from our recent announcements, we're very proud to add McLaren, the current champion in the team and individual championships to our roster for 2026.

And then last but not least, with Dennis Schroder and the German team winning the Euro Champs, at the same time, we are looking forward to Tyrese Haliburton coming back in the new season. So there's a lot of positivity, a lot of great achievements that PUMA as a brand has seen in the year 2025. And we also do see our foundation for future success in exactly those areas. First and foremost, providing innovative technologies for our athletes, for our teams, for our high-performing sports people, whether it's apparel technologies like CLOUDSPUN or dryCELL or the best technology in the running world out there with NITRO. We're extremely proud of the developments and of the success stories our teams have achieved in recent months.

Second to that, our brand will be built on community platforms, connecting with consumers around the world, connecting in new, different and engaging ways to really set the tone and set the standard where PUMA will be at the forefront of conversations again. And of course, it's also about global reach. A brand that is globally recognized but globally also connects on the highest level with partnerships that have been either long-lasting or will be added freshly and newly to excite our audience out there. And that all will be built on 77 years of history, of history that was made out of great products, great athletes and great partnerships that has built PUMA into one of the greatest brands on earth to date. However, we also recognized last year that we have to start to do things differently in our organization and in our brands.

We have called out a 3-year transformation journey that was clearly starting middle of last year with the so-called reset. Let me give you a brief update what we have achieved and what we've done in those last 5 to 6 months since we called this out. So 2025 was not just a year of reset. We have clearly communicated and acted upon key measures and key activities that will take PUMA into a different area and allow us to really fulfill our growth ambitions in the years to come. From a distribution perspective, we have talked about cleaning up undesirable wholesale business, reducing our overstock with wholesale partners and at the same time, reducing our discounts in our own channels, and I come to talk a little bit more in detail about that one.

From a cash perspective, we have become a much more [indiscernible] organization in terms of managing our cash situation. We have definitely reduced our PO placements in order to avoid a further oversupply, for example, for our 2026 business. And at the same time, we have also reset our OpEx operations. We have, for example, significantly reduced our range size and our complexity and also committed to working on our operational inefficiencies as an organization and as a company. When I talk about rightsizing measures across our business, I wanted to give you some details, a bit more flavor what that meant for us. In the U.S., for example, when it comes to undesirable wholesale business, we will decrease our business by the double digits over the next couple of years until the end of this year.

We have already started to reduce our discounting policy in our own e-commerce channels as well in our retail channels. This had already a significant impact, not just on our top line, but more importantly, that people and consumers start to see us again as a serious brand -- as a brand that commands value. And last but not least, as I said, both our inline and non-inline product range will decrease double digit. The season where that will become into fruition will be the spring/summer '27 season. So a lot of measures that we talked about that are now already in place that will show up in the market in the seasons to come. We also have committed to focusing on streamlining our organization. The adjustments we've promised was about 20% of our white-collar positions reduced between '25 and 2026.

500 of those positions have been reduced in the first half of 2025 within the so-called nextlevel program. 1/3 of the additional 900 positions, we have reduced in the second half of last year. That leaves another 2/3 of those 900 positions that we're actively engaging with at this point in time. So we are committed and we're executing to become a better, to become more streamlined, but also more efficient organization going forward. And organization is, of course, built on strong leadership, senior leadership that has the capabilities to transform this organization. What you see here on this chart is the already communicated new addition of Andreas Hubert as the Chief Operating Officer as well as the extended responsibilities for Maria Valdes.

Her role was transformed from being in charge in terms of products only to now adding a responsibility for go-to-market and brand marketing to fulfill a new operating model that we, as an organization, will be carrying in the future. You also see a significant amount of other changes that I will not go into detail today, but they've all been announced over the last 3 to 6 months basically. Allow me to briefly touch on the new brand and operating model. What is new, that we're basically bringing all the elements together that allow us to develop successful and promising and cut-through marketing stories and concepts in the future. That means brand marketing, product creation and the go-to-market teams are all united under one team and will in the future develop concepts and propositions right from the get-go and then take them also fully through into the sales and into the conversations with our customers and with our DTC colleagues.

Under Maria's leadership, we have also restructured our categories with a full ownership proposition moving forward. We've also clearly called out what we say the 4 priority, the 4 DNA categories for PUMA in the future. There will be Football, Running and Training now as 2 separated categories that previously were [ homed ] under one leadership and a focus on Sportstyle, which is the Select and the Prime business, which has been split from the core business. So clearly, a commitment to growth and to grow across a global scale with a dedicated viewpoint on how we will show up as a brand in the future. Also, at the same time, we have developed a new go-to-market calendar that will come fully into fruition for the spring/summer '28 season.

That means we're going to have a more focused approach in terms of alignment internally and improved selling readiness, but also higher efficiencies when as a brand, we go to market. The second significant change that we are undergoing at the moment is under leadership of Matthias as our Chief Commercial Officer. We are going to transform our home region Europe from an organization that has a very small regional layer with 7 -- almost with 7 different competencies in different cluster centers, which led to a very decentralized structure, duplicate a lot of efforts and ultimately also a pretty inconsistent brand activation.

In the future, as of later this year, we're going to increase our regional layer, our European layer. We're going to have 3 more streamlined clusters across Central, North and South. And that also will mean in the future, we're going to have more consistency, stronger efficiencies. There will be a regional ownership of the key growth levers and also allowing us for faster and more aligned decision-making. So these were some of the measures we talked about last year and the execution that was started, but of course, will transition into 2026.

With that, I'll hand over to Markus to talk you through the results.

Thank you, Arthur, and hello to everybody from my side. Following Arthur's remarks, I will now walk you through the key financial metrics and explain how the reset measures he outlined impacted PUMA's Q4 and full year results. On the top line, we saw a substantial currency adjusted sales decline of nearly minus 21% in Q4, leading to a sales decline in full year 2025 of around 8%. Notable reduction in sales of around 8% was primarily attributable to our reset measures initiated during the second half of 2025. Our reset measures can be split up mainly into 3 buckets. The largest impact came from cancellations of undesirable business with wholesale partners in the mass merchant space, followed by inventory takebacks and lower D2C promotions to improve brand perception.

From a regional perspective, -- from a regional perspective, the reset was particularly pronounced in Americas, especially in the U.S., EMEA and China. Now let's have a look at the sales breakdown by channel. Wholesale saw a decline of around 28% in Q4 due to significant takebacks to clear excess inventory in the channel, along with immediate actions to reduce exposure to mass merchants in North America and to phase out undesirable business in Latin America, EMEA and Asia Pacific. In full year 2025, wholesale decreased by 13%. Direct-to-consumer sales dropped 8% in Q4 with owned and operated stores down about 1% and e-commerce falling by 20% due to fewer promotions aimed at strengthening PUMA's brand. For the full year, D2C increased 3%, supported by both brick-and-mortar and e-commerce.

Correspondingly, the Q4 D2C share rose substantially to 41.1% from 35.5% in Q4 2024. For the full year, the D2C share increased to 32.4%. Moving on to the sales breakdown by regions. EMEA sales decreased by around 24% in Q4 and minus 7% in full year 2025. Lower sales were driven by a weaker wholesale performance due to the reduction of undesired business and inventory takebacks as well as lower D2C business on the back of reduced promotions. In the Americas region, sales fell by 22% in the fourth quarter and by minus 10% on a full year basis. The decline was mainly attributable to North America, where sales decreased by slightly more than 33% in Q4 and minus 19% in the full year as a result of the distribution cleanup in the mass merchant business in the U.S.

Sales in Asia Pacific dropped by nearly 13% in Q4 and by 7% in full year 2025. This was mainly driven by a decline in the Greater China wholesale business, which was partially offset by robust growth in the direct-to-consumer channel. Overall, Greater China sales declined by almost 20% in Q4. From a product division perspective, Footwear sales in Q4 decreased by around 25% due to a broad decline across most categories. Within Footwear, we saw growth in the Sportstyle Prime and Select segment, driven by the Speedcat family with particularly strong performance in the Asia Pacific region in the past quarter. However, the Training category remained resilient and delivered healthy growth. Despite an overall decrease in the Running category as a result of the distribution cleanup, Performance Running showed strong growth, driven by the success of the Velocity Nitro 4.

Our Apparel sales fell 14% in Q4, reflecting widespread declines across categories. This was partially offset by growth in Training with continued strong momentum in HYROX. Accessories decreased by 18% in the past quarter, mainly due to Golf. On a full year basis, all product divisions declined in the high single digits. Moving on to the operating performance in the fourth quarter. Gross profit margin was down minus 7.5 percentage points, and I will elaborate a bit more on that development in just a minute. Royalty and commission income was up 36%, mainly due to a transition from a business partnership to a licensing agreement structure with United Legwear. Operating expenses, excluding onetime effects, fell by roughly 8% to EUR 887 million during the quarter.

This decrease was driven by positive results from the cost efficiency program and reduced expenses in the D2C channel, which were a consequence of lower sales compared to the same quarter last year. Driven by lower sales and lower gross profit, adjusted EBIT came in at minus EUR 229 million, down EUR 315 million versus Q4 2024. Onetime effects amounted to around EUR 79 million, mainly related to the cost efficiency program and a goodwill impairment. Reported EBIT, including onetime effects, was around minus EUR 308 million, and our loss from continued operations came at minus EUR 335 million. As indicated, let's take a closer look at the gross profit margin in Q4.

First and foremost, the drop was primarily attributable to increased promotions in the wholesale channel and inventory reserves resulting from the distribution cleanup, both as a result of the reset measures we commenced in the second half of 2025. Additionally, we saw headwinds from unfavorable currency effects from Turkish lira, the U.S. dollar and the Argentine peso as well as a slightly negative regional mix. These negative effects were partially offset by a favorable channel and product mix and slightly lower freight costs. In addition, lower sourcing costs, including duties were a tailwind and therefore, more than offsetting the negative impact from U.S. tariffs.

Now looking at full year 2025 operating performance. The gross profit margin was down year-over-year by 260 basis points. Also here, I will dive deeper into the drivers in a minute. The royalty and commission income increased by 4.4% to EUR 92 million. OpEx, excluding onetime effects, remained flat at around EUR 3.5 billion. I will give more color on that development shortly. Due to reduced sales and gross profit, adjusted EBIT, excluding onetime effects, fell to minus EUR 166 million. We incurred onetime effects of around EUR 192 million. Consequently, the reported EBIT came in at minus EUR 357 million. Loss from continuing operations came in at around minus EUR 644 million.

In light of the net loss recorded in fiscal year 2025 and in order to maintain liquidity, the Management Board and the Supervisory Board of PUMA will propose at the 2026 Annual General Meeting that no dividend should be paid out for 2025. Turning to gross profit margin development in fiscal year 2025. Gross profit margin was down 260 basis points to 45%. On a full year level, increased promotions in the wholesale channel and inventory reserves represented the main headwind. We also saw negative currency effects impacting gross margin, mainly from Turkish lira, Argentinian peso and Mexican peso. This was partially offset by favorable channel and product mix as well as the reduced sourcing costs, including duties.

We managed to limit the adverse impact of U.S. tariffs to around [ EUR 30 million ] in 2025. In 2026, we expect a substantial improvement versus 2025, especially due to lower promotions, including inventory reserves and a favorable channel mix. Now let's take a closer look at OpEx and onetime effects, respectively. OpEx, excluding onetime effects, was flat at around EUR 3.5 billion. Both channel mix as the D2C share, especially e-commerce increased from 28.9% to 32.4%. And other OpEx offset lower marketing expenses as well as savings from the efficiency program. Looking at marketing expenses, I want to highlight that we deliberately did not reduce marketing expenses any further than we did.

In constant currency, it even remained stable year-over-year as we see this cost position as an essential lever to elevate brand perception. Other OpEx includes higher depreciation and amortization costs resulting from investments in D2C and infrastructure, along with approximately EUR 30 million in accounts receivable write-offs precluded an OpEx decline. Due to significantly lower group sales, the OpEx ratio increased by 640 basis points to 48.5%. We recorded material onetime effects, mainly related to the cost efficiency program and goodwill impairments. Personnel expenses accounted for EUR 102 million. These expenses are linked to our cost efficiency program targeting a global headcount reduction.

Impairments were EUR 63 million related to goodwill impairments in Japan, Canada as well as in digital infrastructure. Closing unprofitable stores and other nonoperating costs reached EUR 27 million. Looking forward, we anticipated significantly less onetime effects than what we saw last year. These costs will mainly focus on personnel expenses. Overall, in 2026, we do not expect materially lower OpEx in absolute terms as we will continue to invest in our brand as well as marketing and expect stronger growth in D2C versus wholesale. Let me shed some more light on the drivers of the reported EBIT margin development. Reported EBIT margin was down from 6.5% in fiscal year 2024 to negative 4.9% in fiscal year 2025.

The negative development in gross profit margin had an impact of minus 2.6 percentage points. The effect of royalty and commission income had a slightly positive impact of 20 basis points. While OpEx remained flat in absolute terms, the significant decrease in sales caused the OpEx ratio to rise by 6.4 percentage points. Onetime effects of EUR 192 million also had a negative effect on margin of 2.6 percentage points. Now I would like to take a closer look at working capital. Inventories rose by 2% reported and 11% currency adjusted to around EUR 2.1 billion, partly driven by inventory takebacks from wholesale partners to clean up distribution. This was partially offset by deliberate decrease in purchase volume that we adopted as a strategy to moderate inventory expansion and prevent excess supply.

Trade receivables decreased by around 27% to just over EUR 900 million, mainly due to a significant sales decrease in the fourth quarter. Trade payables decreased by 33% to EUR 1.3 billion, mainly reflecting reduced purchasing volume in the fourth quarter. Working capital overall exceeded EUR 1.5 billion, increasing by 20% against last year and accounted for 21% of group sales compared to about 15% in fiscal year 2024. Staying within working capital, let's take a closer look at inventory development. Our inventory cleanup is slightly ahead of plan. We completed the majority of targeted takebacks, and you can see that Q4 inventory started to decline slightly against the levels seen in Q3.

The decline was mainly driven by [indiscernible] inventory reduction measures, including clearance through factory outlets and selected wholesale partners as well as a restatement effect related to United. We aim to further reduce inventories this year to our own factory outlets and wholesale partners, supported by targeted promotions and disciplined purchasing. We remain firmly committed to restoring inventories to normalized levels by the end of 2026. Let's move on to cash flow and the change in our cash position. We ended the year 2024 with around EUR 370 million of available cash. Due to negative earnings before taxes and increased net working capital, we ended fiscal year 2025 with a negative operating cash flow of around EUR 320 million.

Investing cash flow included CapEx of EUR 206 million focused on digital infrastructure, investments in our D2C channels and initiatives to strengthen long-term competitiveness. Our operating cash flow and investing cash flow summed up to a negative free cash flow of minus EUR 530 million. Financing cash flow amounted to around EUR 400 million and included around EUR 1 billion proceeds from additional financial liabilities to support the operating business and finance working capital. Overall, the cash flow development led to a decline in cash against last year to EUR 290 million. In 2026, we expect our free cash flow to be positive. This brings us to net debt development. The additional financial liabilities resulted in an increase in net debt to just over EUR 1 billion.

End of 2025, we saw a financial headroom of EUR 1.5 billion, including a cash position of EUR 290 million, as shown before, and unutilized credit lines of around EUR 1.2 billion to invest in our strategic priorities. In February 2026, we were able to secure another private placement of EUR 100 million. With this additional financing instrument, we reduced the bridge facility from EUR 500 million to EUR 350 million and secured slightly more favorable financing conditions. The bridge facility was fully syndicated with our core banks. Given the currently elevated level of net debt, deleveraging is a clear priority, and we target to reduce net debt over the coming years.

This concludes my remarks on the financials, and I will now hand back to Arthur for the outlook for fiscal year 2026.

Markus, thank you very much. So let's look forward into 2026, and I want to explain to you again why this year is a year of transition before company then will enter a growth period again. It's very important to realize that the reset measures will now need to be executed throughout the year of 2026. That means, for example, first and foremost, our ongoing efforts to clean up the marketplace and to be diligently working on inventory liquidation will have a high priority for us. I've briefly talked about the new brand operating model that between brand product and go-to-market will fully show the effects in 2027 and to remain in sporting goods terms, that muscle needs to be trained throughout the 2026 calendar year.

We are also, of course, working on our high share of budgets allocated to long-term commitments. So reshaping our marketing working budget to be most effective from a consumer and from a brand proposition perspective remains a high priority for us. The organizational changes that I alluded to will, of course, need to be executed and then reshaped throughout the year of 2026. And then last but not least, you've notified that at the end of January, we do have a new strategic investor with ANTA joining us throughout the year. That, of course, will mean a further transition, a further elaboration on how we're going to set ourselves up as a brand as a business moving forward. What remains constant, however, is that our commitment, our North Star to become a top 3 sports brand remains unchallenged.

We are very clear that it is our ambition to return to above industry growth rates as of 2027 and to return to healthy profits in the same manner. Being a sports brand also means that we have a very clear idea, a very clear outlook in terms of how we want to be perceived and how we want to do this. It's important to say we're going to be one global sports brand, a brand has a global footprint, a brand has a global priority and a brand that activates itself globally within the same manner and tone.

We play this with 2 different or 2 distinct pillars, of course, an elevated proposition when it comes to our heritage of the 77 years of the archive, the great stories that we have achieved over the many decades in the sporting goods industry, at the same time, high attention to our innovations to driving performance with athletes and teams alike across the globe and making sure that PUMA is going to be seen as a sports brand that can help to innovate and can help to push boundaries in sports. For '26, I'm incredibly excited, of course, about the sports moments that are there to come and which we've achieved already. At the very beginning of the year, we had an all-PUMA final at the African Cup of Nations, where Senegal and Morocco were playing the final and Senegal for the second time in a row, took the championship.

Just a couple of weeks later, in Denmark, at the European Handball Championships, we had another all-PUMA final with Germany and Denmark playing in that game. The title was won by Denmark, led by Mathias Gidsel, who is a key ambassador for PUMA in the sports. We're also extremely excited about our future propositions and our opportunities when it comes to running, long-distance running and marathons. Just a couple of days ago, there was a new European record set by Yann Schrub in a 10K race. There was the fifth fastest ever time globally recorded actually.

Moving on to HYROX. As I said already a couple of times, a key partnership for us that we extended in October for another 5 years. [Audio Gap] be a massive event happening in May in New York, and we're also equally excited about the World Championships in Stockholm later on this year, the comeback of Tyrese Haliburton in the NBA performing and outperforming what he started until end of last year. And then, of course, the pending start of the Formula 1 season again with McLaren as a new additional partner to our roster. To support that, we've had already several very exciting launches -- product launches at the beginning of the year. Full sellout of the first ever handball personalized proposition with Mathias Gidsel. The HYROX family has finally gotten its own dedicated piece of footwear.

For the first time ever, we have created a dedicated shoe, a dedicated piece of footwear that has started to sell last week already. The sellout ratios and the response is absolutely phenomenal. And then last but not least, in Running, we continue to innovate with the Deviate NITRO Elite 4. So 3 propositions that were all launched already or are being launched in the first quarter of the year, which will also give me a lot of confidence that NITRO as the best running platform, as the best running proposition will really start to break through in the world of sports. At the same time, we're, of course, also very concerned and very continuously working on connecting ourselves to culture and celebrating sports culture around the globe. We continue to believe in the prosperity of the Speedcat.

We have had a really great activation period throughout the Paris Fashion Week with the SUEDE, which we believe will be the next iconic pillar in our roster for PUMA in the sports lifestyle area. And we've also, in the background, continued to excite and innovate with collaborations that we believe will excite consumers around the globe. So many things have started to happen already to make sure with our brand moving forward, we're going to elevate our game. And the objectives for 2026 are pretty simple and pretty straightforward on this page. First and foremost, the continuation of the 3-year transformation journey that we embarked upon last year. We will transform our company and our brand to succeed in the future with the measures that were outlined previously.

It is our foremost goal to accelerate PUMA's brand momentum in order to achieve commercial success. And the first step here really has to be to drive our brand through the multitude of product launches, integrated storytelling and a much more succinct go-to-market process to subsequently achieve commercial success. We also will shift towards a higher quality revenue with an improved focus on profitability. That also means that we operate in channels which allow for better profitability, which also allow for better pricing and in our very own channels, reduced discounting policy. We're going to elevate the financial discipline and will deliver reliable results as we promised already in 2025.

And last but not least, in order to win, we're going to continue to build a high-performing team around the world, not just from a structure perspective, as I've outlined, but also by getting the best people into the jobs to do the job for PUMA moving forward. Now let's take a look at 2026 and the outlook, what are the expectations and the underlying assumptions for this year. From a sales perspective, as for top line, we expect a constant currency sales decline in the low to mid-single-digit percentage range. FX headwinds are expected around 3 percentage points. From a regional perspective, the primary driver for the sales decline will be reduced sales in North America, which is a further consequence of our strategy to streamline the distribution they've already initiated in 2025.

On the other more positive side, sales will grow in Latin America, the Middle East, Africa and India. ANTA's recent acquisition of 29% stake in our company will most likely negatively impact our business in Greater China in 2026. Nevertheless, we believe that this partnership will deliver substantial mid- to long-term benefits for our brand and our company. With regards to sales channels, we anticipate a decrease in wholesale sales, while our direct-to-consumer business is expected to grow currency adjusted. We also do expect that the second half of '26 will be stronger than the first half. Additionally, sales in the first quarter of '26 should align with our full year outlook. The expected sales decline, our reported EBIT is forecasted to range between minus EUR 50 million to minus EUR 150 million. This includes onetime effects, which are projected to be significantly lower compared to last year.

As Markus already mentioned, we also anticipate a substantial improvement in our gross margin, while OpEx are not expected to be materially lower in absolute terms as we continue to invest and strengthen our DTC channels. And finally, our CapEx is expected to come in at around EUR 200 million, and we will focus mainly on our digital infrastructure and investments in our own channels.

So I trust you've seen from us that we are engaged in building a strong foundation for this business and for this brand to then return to profitable growth in 2026 and that year of transition is absolutely required for us to make the appropriate adjustments and to execute the promises which we've given in '25.

That being said, we are at the end of the presentation, and I want to hand back to Manuel. Thank you.

Thank you, Arthur. Thank you, Markus. We are now ready to start the Q&A session. Operator, please open the lines for questions.

[Operator Instructions] The first question comes from the line of William Woods from Bernstein.

The first question is on inventory and inventory clearance. When you look at how much inventory is still out there in wholesale channels, how much do you think is out there? And do you think there's still a way to go to clear that -- some of that wholesale inventory? And then the second one is on kind of kickstarting the brand heat and brand growth again. I suppose how do you think about doing that over the next 6 months? Is this something that you're going to start doing in kind of H2? And what do you think we should be looking for in terms of seeing that inflection into H2 and into 2027?

Thank you, William, for your questions. I will start with the first part, and then Arthur will answer on the brand momentum. Regarding inventory, I shared also in my prepared remarks, with the reset in 2025, we've completed the majority of the targeted takebacks from the wholesale accounts. So that's where we've been making very good progress.

On top of it, and I think as you've seen, I think that we are slightly ahead of plan also with the development from Q3 to Q4, we've been making good progress as we reduced our purchase orders as also Arthur outlined in the presentation and of course, are targeting to further reduce the excess inventory through our own factory outlets and also selected wholesale partners. So rest assured, I think we are firmly committed also to come back to normalized inventory levels at the end of 2026.

Thanks, Markus. And yes, William, allow me to talk about the plans, how to increase our brand heat. So we have not just reorganized our teams for future success in spring/summer '27, but of course, we've taken immediate measures when it comes to '26. The platforms that are provided for us are the World Cup in North America, of course, our partnership with HYROX, a much better communication, a much more succinct conversation about NITRO as a platform and then engaging with our style audience differently. Some of those things, you've seen already happening around Paris, where we ignited a conversation around the SUEDE.

We are going to be continuously focused on Speedcat as a second pillar when it comes to our style proposition. And what you can expect also from a consumer perspective is a shift away from conventional above-the-line media purchasing to a much more grassroots to much more personal conversation that will help us also to engage with consumers more in the long term and more frequently than just sporadically popping up.

You'll also see a highlighted conversation around products to make sure our consumers do understand what, for example, a great technology like NITRO will mean for them in the future and what benefit it can provide versus just having a very generic conversation about running as a proposition. So these are some of the things consumers can expect from us now already, but definitely heading into the second half of this year.

Next question comes from the line of Warwick Okines from BNP Paribas.

Two questions for me, please. Firstly, you're reducing your dependence on the undesirable wholesale, as you've described. But actually, through this inventory cleanup process, you're having to use mass merchants to help you clear. So does that hurt the brand in the short term? And then the second question is actually around ANTA. I mean, does it still make sense to hold a strategy update in Q2 given that you've got a new partner coming on board? And actually, if you don't mind a sort of subset to that, you made a comment about China in your outlook and ANTA, and I didn't quite understand that, perhaps you could elaborate.

Okay. Thank you very much for those questions. So I'll start with the inventory cleaning. We have taken a significant amount of inventory back. That doesn't mean we're then going to relaunch them in the market with mass merchants. We have, of course, engaged with wholesale partners on those inventories, on those packs, and we have a dedicated plan in place with our very own channels to gradually throughout the year, liquidate that inventory to fulfill the promise that Markus was alluding to that our inventories by the end of this year will be on a level playing field again.

Secondly, a very good question regarding the strategy update. Yes, we have initially talked about having a full strategy update for Q2. But as you've alluded to, with a new partner coming on board, it is more than prudent for us to fully assess the new factors, the new opportunities that this partnership will bring to us. And therefore, instead of giving you a full strategy update, we are committed to updating you on our progress as we go through the upcoming quarter reports or we'll, of course, discuss with a future partner more long-term ambition and more long-term strategy as we go along. Thank you very much. And then to your third question, the impact on China that I was alluding to, let me just put this into perspective.

Our business in China is just shy of around about EUR 500 million in 2025. The split of our business in China is reverse than it is globally. So about 70% of our business, we do in DTC channels and 30% is in wholesale, primarily with franchise partners. Our Greater China wholesale business, we do, of course, have ongoing commitments with our wholesale partners. Now as ANTA enters as a strategic partner, and we're very grateful for that, it does bring a unique DTC approach. Our partners do anticipate that PUMA's distribution model might shift in the future towards a more DTC-led share versus where we are today. These anticipated results might lead to commitments with our wholesale partners not being extended, such, for example, as new store openings, renovations or even their ordering.

We expect this to lead to a negative impact in our Greater China business in 2026 as these commitments might not be extended. However, we do anticipate that the medium- to long-term benefits for us are significantly outweighing those short-term volatility. So the collaboration with a strategic partner, we're also possessing unparalleled expertise in the region. We are positioned to access one of the largest sports markets globally and differentiate ourselves over the medium to long term. So in our outlook in '26, a potential short-term impact on our wholesale business is assumed and reflecting both sales and profitability.

The next question comes from the line of Anne-Laure Bismuth from HSBC.

I will start with the first one about the fact that you used to be the go-to brand for the Formula 1 or the lifestyle basketball. But given the increase in the competition, particularly in Formula 1, on which category can you differentiate yourself versus the competition? And my second question is about the rightsizing of the wholesale distribution. How far are you in the process? You talk about a double-digit decline in the U.S., but will you also rightsize wholesales in other regions? And what do you see as a healthy balance between D2C and wholesale for the group going forward?

Thanks for the question, Anne-Laure. So let me start with our focus on which categories we are going to differentiate ourselves. So first and foremost, as I said, NITRO as the best platform in Performance Running is a key differentiator for us. From a results perspective, from a testing perspective, we are far outpacing competition there at the moment. We'll definitely also differentiate ourselves in the space of Training with a unique partnership that is HYROX, an exclusive partnership that we've extended over the last 5 years, and that will be unrivaled and no one else in the sporting goods industry can compete and match against that.

I would also like to point out because you said Formula 1 that we're, of course, not just giving us -- giving up our competitive advantage because we will add with McLaren, the winning the defending champion both in constructors, but also in the individual titles, next to Ferrari and Aston Martin, I would say, an unrivaled positioning. And in the other categories that I don't know dwell deeper on, of course, we're looking at competitive advantages versus other sporting goods players in there. But I'm very confident specifically with the 3 platforms I've mentioned previously that we have a very promising roster for us to differentiate ourselves as a brand and to create a brand heat moving forward.

Second question was about rightsizing of wholesale in other regions. The effort that we have started was not just focusing on North America, where we most likely have the highest exposure to mass merchants, but the effort was started everywhere across the globe. We are working with Matthias' team on a very clear and globally consistent pyramid, the segmentation pyramid when it comes to wholesale customers. And we're also making sure that with our future efforts, our wholesale business remains healthy. That means we have, as we've communicated last time, proactively reduced purchase orders for the early half of 2026.

But at the same time, with the measures I've just mentioned a few minutes ago, we are keen to grow in the better wholesale channels, the branded wholesale channels where we can also appear as a premium brand and command full price sell-throughs. And the last question, I think, was relating to an ideal or healthy mix. I think the proximity of what the industry overall at the moment is positioned in [indiscernible] 60-40 split, 60% wholesale, healthy wholesale business and 40% DTC will also be the areas we will be landing on as a brand in the future. Thank you.

The next question comes from the line of Jurgen Kolb from Kepler Cheuvreux.

Two questions really. First one on the previous question really, the breakdown. Arthur, you mentioned 60-40. Within this 40%, where do you see the digital contribution? And in this respect as well, I think you were targeting to hire a dedicated manager for your digital business. Has that already been done? And the second thing is maybe a little bit longer term out, as you and the whole team has obviously gone through the numbers and the strategies and what have you. Longer-term view, gross profit margin potential, what do you think is possible for this group when you target more the better distribution channels, less discounting, maybe a little bit better distribution mix when we're talking about a stronger focus on higher-priced products. Just your thoughts as to what you think could be possible in a longer-term perspective.

Thank you very much, Jurgen. I'll take the first part and then Markus will elaborate a little bit on the second part. But of course, as you said, those are connected to each other. So from a DTC and specifically from an e-commerce perspective, yes, we do anticipate higher -- significantly higher growth rates in our e-commerce business. That's why we also said from a CapEx perspective, we are going to invest -- overinvest in our digital capabilities as a company, which, to a large degree, will, of course, benefit our digital platforms and our digital business moving forward.

We do see PUMA at the moment underpenetrated versus competition, but also underpenetrated within our own ecosystem. The position of the Global VP of E-commerce, a role that we've split recently, we are making significant progress. I'm pretty confident that in the next few weeks, we can also give you an update in that regard.

Jurgen, thank you for your second question. Let me start with walking you through what are the gross profit margin drivers also for 2026. We also -- as we shared in the prepared remarks, I think we're expecting a substantial improvement in our gross profit margin in 2026, mainly driven by, of course, low promotions and of course, also the change in inventory reserves.

In terms of the overall, and I think your question was also going beyond 2026, looking at the midterm development, we will provide more information on midterm targets in due course and take, of course, the recent developments, and I think then also now on the shareholder side, I think as Arthur also mentioned earlier into account and include this in our discussion. Coming out of the resets, I think, in 2025, it's not prudent to provide a midterm target or ambitions at this point in time.

The next question comes from the line of Thierry Cota from Bank of America.

First on the takebacks, please. Could you give us the amount of takebacks that were realized last year, EUR 1 million in the second half? And what was the organic growth rate ex takebacks in Q4? And secondly, Arthur, I didn't fully understand what you said regarding '27 targets when you said healthy profitability should evolve in the same manner. I'm quoting what you said. I think you've been extremely clear on the growth and the idea of growing faster than the industry, which I think you put last time we talked at around 5% growth, so above that. But on healthy profitability, where do you place it for next year and going forward, please?

Thank you for your questions. Looking at the first chart, and I think going back to inventory takebacks and also that you understand the magnitude of the reset, in the financial part, the first chart that I shared also gave you an illustrative indication that our sales decline on a currency adjusted basis for the full year 2025 is mainly driven by the reset initiatives. And from the reset initiatives, the reduction of the undesirable business has the biggest impact then followed by the takebacks and of course, the reduced promotions. And these 3, of course, also factors and those key drivers also of the reset, of course, impacted also our fourth quarter results in 2025.

And let me allude to the 2027 comments I've made. So we do expect to grow above the industry average at that point in time. That without having a crystal ball should be something in the low single digits to mid-single digits, and we are committed to develop our plans and therefore, also guide around that one. From a profitability perspective, yes, we will be turning into a healthy company again as of '27 and beyond. However, at this point in time, I would not make any comments in terms of where that will be exactly. And I hope and I trust you would understand that at this point in time.

The next question comes from the line of Piral Dadhania from RBC.

Two, please. The first is just on the product offer. I think you talked about rationalizing the range. Could you maybe just elaborate a bit on which categories you've had to cut down on, in particular? Is it more Footwear or Apparel and within which category, if possible? Going forward, do you expect to run this kind of range size? Or should we expect it to maybe grow in the future as the product pipeline starts to populate? And just in relation to the price positioning, you've given us a lot in terms of what you've done in terms of inventory clearance.

How do you view the current PUMA price positioning in the marketplace relative to your competitors and the brand equity? And is there any scope for change there? And then secondly, just on wholesale. Could you maybe just give us a flavor as to what the type of conversations you're having with your partners is like? Are they encouraged by the reset actions that you're taking? Are they giving you indications that they will support the expansion of your market share? And do you have a sales team on the ground in your major markets to help to develop those relationships? Or do you need to invest in that capability?

Thank you very much, Piral. So let me start with the product range and the size of that range. So we have across the board investigated in which categories of Footwear, Apparel, but also in which sports we're going to reduce. Overall, I can say in every category that is out there, we have started to reduce our range, and we have decomplexified our offer basically. That should allow us across the board in each and every area to be more pointed, to be better from a storytelling perspective and to be more streamlined towards our consumers and also our customers.

I do not anticipate that, that will bounce back in the very near term because I'm very convinced we have a very sufficient product offering across all categories, across all sports and also to cater for the short to midterm opportunities for PUMA as a brand. Should we decide to go into other sports or other categories in the future, that, of course, would need to be revised. From a current price positioning of PUMA, I think we've alluded to that, of course, our first and foremost concern is to reduce the discounting of our very own products, starting in our DTC channels and then also figuring out a way how to play -- in the better in the more ambitious sales channels in the future.

I am, however, very, very encouraged by our success that I've just alluded to, the running and the training footwear franchise I've mentioned that had tremendous sellouts at the beginning of the year already are commanding price points of around about EUR 250 each. That is very much at the top of the pyramid from an industry perspective. So as a brand, we are absolutely capable and competent to sell products at those high and premium price points at very good ratios. And last but not least, you talked about the sentiment of our wholesale partners. Yes, I'm not just traveling frequently. I was in the U.S. recently around the All-Star Weekend. I've pretty much met as my team has all major wholesale partners.

They do believe in our story. They are supporting the reset of our brand, and they do believe in a significantly brighter future for the PUMA brand. That, of course, entails the hard work I was alluding to in 2026 and us convincing them with more -- with better propositions as of spring/summer 2027. And yes, of course, in all markets, not just the major markets, in all markets, we have sales teams on the ground. Those sales teams, however, are also reorganized and adjusted to make sure they're going to cater for our opportunities, first and foremost, for example, in the specialist channels that are catering for the Running consumers where we, as a brand, have started to invest already significantly as of the end of 2025.

Next question comes from the line of Adam Cochrane from Deutsche Bank.

First question I've got is, do you think that given the balance sheet and the cash position, that there's any constraints that have been put on your plan because of the sort of current financial position? Or is everything that you want to do -- able to do within the current resources given the available liquidity that you pointed out? And the second question is really one in terms of the sort of shape of sales throughout 2026. I know that you talked about the second half being stronger than the first half. But given the sort of Q3, Q4 split, there's some quite big moving parts within that.

What I'm trying to sort of get to grips with is, is how bad could Q1 be? And I think you answered earlier, but I didn't quite work out exactly what you're trying to say. What was the organic growth rate in Q4 without the takebacks? And is that the way we should think about Q1? And then the other bit that I was thinking about is these products that you bought back, does that actually boost your sales growth next year? Or is there a risk that it dilutes it because people purchase the discounted product rather than full-priced product? So just getting an idea of how you think about that.

Thank you, Adam, for your questions. On the balance sheet, as we've worked through, especially the fourth quarter, and you've seen also the press release we issued in December, where we secured additional financing. And if I look also and what I shared in my prepared remarks, at the end of 2025, we had total EUR 1.5 billion of financial headroom available between our cash and also the unutilized credit lines. So in terms of the additional financing and I think then also -- and providing additional financial flexibility to support also the investments into strategic priorities, we've completed, I think, what we've planned. Then would you like to -- Arthur will take you through the phasing of 2026.

Yes. I think your question was specifically on the first half. And I just want to reiterate, maybe that wasn't clear enough what I said during the presentation. So we do expect our sales in the first quarter to align with our full year outlook. And that full year outlook, just to remind again, was a constant currency sales decline in the low to mid-single digits. Let's just not forget, we have taken a significant amount of purchase orders out of the first half in '26 last year already.

So we've been collaborating and working with our wholesale partners primarily in order to avoid further overstock situation and that will, of course, have an impact on our top line results in the first half. That is all baked, however, in our outlook. And then at the same time, you've asked about the organic performance in the fourth quarter. A similar answer to that with us taking significant stock out of the market that, of course, has reduced our top line performance in the third, but more specifically, as Markus pointed out, in the fourth quarter. Will those takeback products materially impact our performance in '26?

No, not really because that is exactly the purpose why we took those products out of the market, why we've put them in our own inventory positions and why we have developed plans both with wholesale customers and within our own DTC channels to liquidate them in a more responsible and in a more planned manner throughout the year of 2026. I would like to point out at this moment as well, however, when we talk about a significantly reduced discounting policy, we will, at the appropriate moments in time when the entire industry is going into discount mode, of course, do the same from a PUMA perspective. And these will be the windows that allow us as a brand then to liquidate overstock and residual products like competition will be doing in the future. Thank you.

We now have time for one more question, which comes from the line of Robert Krankowski from UBS.

Two questions from me, please. The first one will be on gross margin. We heard that there is going to be a substantial improvement to gross margin, and you mentioned specifically the promotional activity. Are there any other positives that we should be thinking about gross margin, maybe specifically the FX hedging in the second half? How material can it be for 2026?

And the second one will be just a clarification on the industry growth because now we heard that it's going to be low single digit to mid-single digit potentially in 2027. I think previously, it was roughly 5%. What has realistically changed in the last few months? Is there anything new that you realized? Or what basically is driving the change in the view, if you could share any more details?

Thank you, Robert, for your questions. And let me guide you through the gross margin drivers for 2026. We expect, I think, as we [ said ] earlier, a substantial improvement in our gross profit margin and the drivers are mainly promotions as we continue with the efforts to reduce promotions to our D2C channels and inventory reserves. In addition, also, we expect some tailwind from the channel mix. I think as we also talked about, I think we expect a strong growth in the D2C channel compared to wholesale.

And I think there's a little bit of shift in the distribution mix, I think, contributes also to the gross profit margin development. As you pointed out, and of course, also given the weaker U.S. dollar, the weaker U.S. dollar is with our hedging policy, a tailwind in the second half of 2026, but it's a slight tailwind. So that's why we didn't call it out earlier when we talked about the key gross profit margin drivers.

Yes. And Robert, to your second point, let me just clarify, I did not fully give you an outlook of the perceived industry growth. I was [indiscernible] saying, of course, we expect a mid-single digit, 5% roughly growth in the market. However, it would not be prudent at this point in time to commit to such a growth. What we are committing to, of course, is that should the industry average be that 5% or mid-single digit, PUMA will grow above that industry standard in '27 again. We'll update you later in the year as we have more transparency also on how the year '26 as an industry unfolds to then project that growth for the next year. Thank you.

There are no further questions at this time. I hand back to Manuel Bosing for closing comments.

Thank you very much, Maura, and thanks to everyone for your questions. We appreciate your interest in PUMA, and we look forward to speaking with you again soon. This concludes our call for Q4 and full year 2025. Thank you, everyone, and goodbye.