Puma's Reinvention: Can the New Leadership Close the Gap with Adidas and Nike?

The premium sportswear sector in 2025 is a battlefield of innovation, brand loyalty, and operational agility. Puma SE, long overshadowed by giants like Nike and Adidas, has embarked on a high-stakes gamble: a leadership overhaul and aggressive operational restructuring under the banner of its “nextlevel” program. With Arthur Hoeld at the helm—formerly a 26-year Adidas veteran—the question looms: Can Puma's strategic pivot bridge the widening performance gap with its rivals?

The Leadership Shift: A Double-Edged Sword

Hoeld's appointment in July 2025 was a calculated move. His tenure at Adidas, where he oversaw lifestyle segments and celebrity partnerships, positions him to tackle Puma's core challenges: stagnant margins, overreliance on wholesale, and a brand identity that struggles to resonate with Gen Z. Early priorities include scaling the “Go Wild” campaign, accelerating direct-to-consumer (DTC) sales, and deepening micro-influencer engagement. While his expertise in revitalizing brands is promising, the risk lies in replicating Adidas's playbook in a market where Nike and Adidas are already refining their own strategies.

Adidas, for instance, has leveraged its agility to gain 0.1 percentage points of market share in 2025, driven by its Originals line and performance footwear. Nike, meanwhile, faces a 0.3-point decline due to delayed innovation and a faltering athlete strategy. Puma's task is to exploit these gaps while mitigating its own vulnerabilities—namely, a bloated cost structure and a DTC model that, despite 16.6% growth in FY24, has yet to translate into profitability.

The “Nextlevel” Cost Efficiency Program: Cutting Costs or Cutting Ambition?

Puma's restructuring efforts are aggressive but fraught with short-term pain. The “nextlevel” program, launched in February 2025, aims to reduce product complexity, cut 500 global staff positions, and close unprofitable retail stores. While these measures are expected to generate €25 million in EBIT by 2027, they've already exacted a toll. In Q1 2025, restructuring costs reduced adjusted EBIT by 52.4% to €76 million, and Q2 saw a net loss of €247 million.

The financial risks are clear: One-time costs of €75 million and a projected full-year EBIT loss for 2025. Yet, the long-term logic is sound. By improving gross margins (targeting 8.5% by 2027) and shifting toward DTC, Puma could emulate Adidas's success in balancing cost discipline with brand elevation. However, the company's reliance on capital-intensive DTC expansion—such as new retail formats and warehouse infrastructure—risks overleveraging a balance sheet already strained by refinancing and share buybacks.

Benchmarking Against Rivals: A Glimpse of Hope

To assess Puma's potential, consider the contrasting trajectories of Adidas and Nike. Adidas's 2025 performance—12% currency-neutral net sales growth in Q2, driven by Running and Training categories—proves that a focus on performance innovation and localized marketing can yield results. Nike's struggles, meanwhile, highlight the dangers of complacency: A delayed NikeSKIMS collaboration and lack of compelling product launches have eroded its premium market share.

Puma's recent initiatives, such as the Speedcat line and partnerships with Spinnova for sustainable materials, show promise. These moves align with the premium sector's shift toward eco-consciousness and performance-driven design. However, the brand's 2025 Q2 results—a 2.0% currency-adjusted sales decline and a -13.2 million adjusted EBIT—underscore the urgency of proving that its restructuring isn't just cost-cutting but a catalyst for reinvention.

Investment Implications: A High-Risk, High-Reward Proposition

For investors, Puma's 2025 restructuring is a gamble with binary outcomes. On the upside, a successful pivot could unlock value through improved margins, a stronger DTC model, and renewed brand relevance. The company's recent refinancing—expanding its credit facility to €1.2 billion and issuing a €210 million Schuldschein—provides liquidity to weather the transition.

On the downside, the aggressive cost cuts risk alienating key stakeholders, from employees to retailers. The U.S. tariffs, which are expected to reduce Puma's gross profit by €80 million in 2025, add another layer of uncertainty. Moreover, Adidas's 9.6% operating margin in H1 2025 (vs. Puma's -13.2 million adjusted EBIT) highlights the gap in operational efficiency.

The Verdict: A “Buy” with Caution

Puma's leadership overhaul and “nextlevel” program are bold, but their success hinges on execution. The stock is currently undervalued relative to its peers, with a price-to-earnings ratio of 8.3x (vs. Nike's 22x and Adidas's 15x) and a forward EBIT margin of 7.1% (vs. Adidas's 9.6%). For risk-tolerant investors, a long-term position in Puma could pay off if the company's 2027 margin targets are met and its DTC growth accelerates.

However, short-term volatility is inevitable. The next six months will be critical: If Puma's Q3 and Q4 results show signs of stabilization—such as a narrowing EBIT loss and positive DTC sales growth—it could signal a turning point. Until then, a cautious approach is warranted.

In the premium sportswear war, Puma is no longer a footnote. Whether it becomes a contender depends on Hoeld's ability to transform a company in crisis into a force of innovation—and fast.