Puma lags behind in the competition of sports equipment giants – The share value collapsed by one-fifth after the earnings forecast

German sports equipment manufacturer Puma is getting weaker and weaker under the pressure of its eternal rivals Adidas, Nike and new competitors. The value of the company’s share collapsed on Thursday by more than 23 percent, after it had reported preliminary information on the earnings development at the end of last year.

The company’s turnover calculated at constant exchange rates for the entire year 2024 grew to 8,817 million euros, but profitability was weaker than expected. Puma made an operating profit of 622 million euros.

Managing director Arne Freundtin according to the plan is to improve profitability with a savings program. Compared to its competitors, Puma is already small, which does not make it easier to survive.

“We are not satisfied with the profitability,” Freundt said in the company’s announcement.

For example Adidas’ turnover is about three times that of Puma’s. On the other hand, the turnover of Nike, the world’s largest sports equipment manufacturer in the United States, is more than double that of Adidas, last year it was more than 51 billion dollars, or about 49 billion euros.

According to analysts interviewed by the news agency Reuters, Puma’s big investment, the retro shoe collection Speedcat, has not been as successful as expected, even though a lot of marketing money has been invested in it.

Adidas had difficulties in 2022-2023 when its artist Kanye Westin (now called Ye), the wildly successful Yeezy shoe collection suffered from West’s anti-Semitic comments. Adidas ended the cooperation in 2023.

Adidas however, turnover and profit grew at a good pace last year. According to preliminary data published by the company, turnover increased by more than 11 percent to 23,683 million euros. Operating profit quadrupled to EUR 1,337 million.

Still, the sports giant is said to be planning layoffs of up to 500 people in the head office operations. Adidas’ headquarters in Herzogenaurach, Germany has approximately 5,800 employees.

Puma’s head office is also located in this same Bavarian city.

Adidas led by a Norwegian Bjorn Gulden. He has decentralized the company’s decision-making from the head office closer to the market and has already talked about the need to simplify operating methods.

Puma’s market value has decreased by 58 percent in five years. The value of Adidas has weakened by 18 percent in the same time.