Puma shares fell by 16% as the market opened Thursday after the German sportswear brand reported lower than expected fourth-quarter sales and a decline in annual profit.

The weak results late on Wednesday came after rival Adidas reported strong sales and profitability, highlighting the work Puma still faces to boost its brand, JP Morgan analysts said.

Puma sales were down 16.5% at 34.90 euros as of 0845 GMT, hitting a five-month low and on course for their worst day ever.

Puma has been marketing new shoes such as the motor racing-inspired Speedcat in the highly competitive sportswear market where Adidas has dominated helped by its retro Samba soccer trainers.

Puma's fourth-quarter sales grew 9.8% in currency-adjusted terms, against the 12% growth expected by analysts. Net profit last year fell to 282 million euros ($293 million) from 305 million.

The company did not provide any details on Wednesday about what led to its weaker than expected sales. CEO Arne Freundt had said in November he was confident about demand heading into the year-end shopping season.

Puma launched a cost-cutting program aiming to reach an earnings before interest and tax (EBIT) margin of 8.5% by 2027, up from 7.1% in 2024.

Barclays analysts said there is a risk the cost-cutting drive would take management's focus away from increasing sales.

"At this stage, we see more questions than answers about the path that Puma will take in the next three years to 2027," Barclays analysts said in a note.

Puma is scheduled to provide more detailed guidance when it publishes its full-year report on March 12.

($1 = 0.9610 euros)