German sportswear company Puma (PUMG.DE), this week forecast sales and profits this year below analyst expectations, sending its shares down over 8 per cent to their lowest since 2018, blaming a tougher economic environment and softer demand.

The company said it expected mid-single-digit growth in currency-adjusted sales this year, compared with the 6.6 per cent growth delivered in 2023.

It also projected earnings before interest and tax (EBIT) of 620-700 million euros ($676-763 million), below the consensus forecast of 726 million euros, according to Citi analysts.

“We are surprised and disappointed by the magnitude of the lower guidance (versus) our below-consensus expectations,” RBC analyst Piral Dadhania said in a note to investors.

Many retailers are struggling as high interest rates and uncertainty about economic prospects amid wars in Ukraine and the Middle East weigh on consumer spending.

“For 2024, we foresee the geopolitical and macroeconomic challenges as well as highly volatile currencies to persist. This continues to weigh on consumer sentiment and demand, especially in the first half of 2024,” Puma’s CEO Arne Freundt said in a statement.

After clearing its inventories, however, the company is in a better position than it was at the start of 2023, with an innovative product pipeline and plans to launch its new brand campaign soon, Freundt added.

The comments echo rival Nike (NKE.N), which trimmed its annual sales forecast in December and announced a $2 billion cost-saving programme.

For 2023, Puma reported sales of around 8.60 billion euros and EBIT of about 622 million euros, broadly in line with its forecast for high single-digit sales growth and EBIT of 590-670 million euros.

The company said the results were hit by a 54 per cent plunge in the value of the Argentine peso in December.

At 0926 GMT, Puma shares were down 5.7 per cent at 40.5 euros. Shares in German rival Adidas were down 1.6 per cent.

($1 = 0.9200 euros)