A whole host of former and current world-class athletes came to Herzogenaurach as congratulators: Wimbledon champion Boris Becker was there, as well as football World Cup champion Lothar Matthäus, sprint legend Usain Bolt, still holding world records for the 100 and 200 meters, two-time long jump Olympic champion Heike Drechsler, and Armand Duplantis, the pole vault sensation and world record holder. At Puma's headquarters in the Franconian town of Herzogenaurach, the brand ambassadors - now dubbed Puma legends by the three-quarters-of-a-century-old company - discussed their career paths, lows, and highs.

In elite sports, victory and defeat are paramount. "Losing doesn't feel good," Linford Christie admitted at the Puma celebration at the end of September. "But you need it because it keeps you going." The Briton, who became Olympic and World Champion in the 100-meter sprint in the early nineties, experienced his probably greatest defeat in 1999: after a positive doping test, the Athletics World Federation banned him, leading Christie to retire.

A few days after the celebration, Puma had to face a kind of defeat as well. At least the festive mood likely came to an abrupt end when the sportswear company's stock price plummeted by 11.5% on the Xetra market. According to Bloomberg, this was the most significant daily loss since March 2020. Back then, the entire industry faced a heavy burden due to the closure of many stores caused by the COVID-19 pandemic.

Now, investors fear that Puma's business might not have performed well in the third quarter. Weak economic conditions and high inflation are affecting consumer goods industries in Europe and North America. In addition, business recovery in China has been rather slow after the pandemic. Nervousness in the stock markets has been increasing for some time as well. A bit of uncertainty is enough to trigger strong reactions. Puma has announced its quarterly report for October 24.

Stock analysts have recently expressed skepticism in their comments. Stifel Investment Bank, for example, suggested that Puma's revenue growth and gross margin might have fallen short of market expectations in the third quarter. According to the industry observers at the Canadian bank RBC, Puma's year-end targets are likely out of reach. Stifel had initially expected Puma to raise its forecast following Nike's well-received quarterly report two weeks ago. However, the recent signals from the company have disappointed this expectation.

Negative currency effects led analysts at Deutsche Bank to lower their projection for Puma's operating profit for this year and the next. Since mid-July, the euro has significantly depreciated against the dollar, making the purchase of goods, mainly produced in Asia and paid in dollars, more expensive for European sportswear companies. The analysts' evaluations vary widely. DZ Bank, for instance, stated that Puma's communication with the capital market didn't provide clues explaining the recent sharp decline in stock prices. The company itself responded briefly to the significant daily loss: the stock price wouldn't be commented on, but the outlook for 2023 was confirmed.

CEO Arne Freundt barely provided more specific information in the financial newspaper "Euro am Sonntag": The forecast stands, and Puma is on track to achieve it. It indicates that the company can continue gaining market share in a very challenging market environment. Nonetheless, Freundt's words only brought slight reassurance: on the day after the drop, the stock price recovered by 2.5% but fell by 2.1% the following Monday. Fortunately, on Tuesday, in a very bullish market, it rose again by 2.1%. Just two weeks ago, the situation had looked much better: on September 28, industry leader Nike's quarterly figures and its good performance had also boosted the stock prices of Puma and Adidas.

Investor confidence was particularly restored by the fact that, in the months from June to August, Nike reduced the excessively increased inventories by one-tenth, learning from the shortages experienced during the pandemic. And it was achieved without resorting to higher discounts, something that was not possible in the previous months. Additionally, CFO Matthew Friend hinted at increasing gross margins for the current quarter, which would be the first rise in a year and a half, while sales are expected to increase slightly.

Since the publication of the report and outlook, Nike's stock price in New York has increased by about 10%. Nevertheless, compared to the start of 2023, the stock has decreased by almost 20%. And compared to its peak almost two years ago, the price has fallen by over 40%. Puma's market value has also more than halved over this extended period.

Adidas shareholders were hit the hardest: compared to the peak in August 2021, the price fell to less than a third by early November of last year. The change in the helm from Kasper Rorsted to Bjørn Gulden revived the stock. In the wake of Puma's plunge last Thursday, Adidas shares lost 3.7% in value. However, the company made up for this loss with an almost 9% gain in the past three trading days.

The reason is likely that, unlike Puma, the signals from the board regarding the current business were well received. RBC analysts concluded from the statements that inventory reduction is progressing. They also anticipate a higher annual forecast when Adidas presents its quarterly figures on November 8. The analysis firm Jefferies already considers the existing targets to be low hurdles.

Gulden has shown a tendency to set the bar lower during his nine years as Puma's CEO. He describes 2023 as a transition year for Adidas before the return to growth and higher profitability. After the half-year figures, Gulden already promised a smaller drop in revenue and a lower operating loss than initially announced. This is primarily due to the solution for the "Yeezy" shoes from the terminated collaboration with the controversial rapper Kanye West: Adidas sells the sneakers in tranches and donates part of the proceeds. After the significant setback, this seems like a small victory at least.