(Bloomberg) — Puma SE slashed its earnings forecast for the year amid strikingly weak demand for its sports and athleisure products and growing concerns about the potential impacts of US tariffs.

The German company now expects to report a loss in adjusted earnings before interest and taxes this year, according to a statement late Thursday that showed disappointing preliminary second-quarter results. 

That’s a marked downgrade from Puma’s previous target, which called for profits by that metric to reach a range of €520 million ($611 million) and €600 million. It’s also far below the average analyst estimate, which foresaw a €489 million gain for the year. 

Puma cited weaker sales in North America, Europe and Greater China during the second quarter and said that trajectory will probably continue through the rest of year, causing high inventory levels. The company missed estimates on both sales and profit in the second quarter. 

It now expects currency-adjusted sales to decline by a low double-digit percentage this year. The previous forecast called for growth in the low- to mid-single-digit percentage range.

The company anticipates US tariffs to hurt gross profits this year by about €80 million.

Since arriving at Puma on July 1, Chief Executive Officer Arthur Hoeld is looking to reset a brand that’s struggled in recent years to connect with consumers. The Adidas veteran took over after Puma’s former CEO Arne Freundt left following a string of profit warnings and a disagreement with the supervisory board over the company’s strategy.

Puma was banking much of its performance this year on being able to sell between four and six million pairs of the thin-soled Speedcat sneaker and related models like the Ballet shoes. That push was part of Freundt’s broader effort to deepen Puma’s profile on higher-end sneakers and sports gear. 

Puma has struggled in recent years to roll out a product that’s capturing the zeitgeist. Meanwhile, cross-town rival Adidas has excelled at that, especially with its retro Samba and Gazelle sneakers. Hoeld helped oversee the rollout of those shoes while at Adidas earlier this decade.

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