Puma overtakes Under Armour in share performance

By

Obi Anyanwu

Published
Mar 7, 2017

The competition for sportswear supremacy has taken a surprising turn. Bloomberg reported on Monday that Puma has overtaken Under Armour in share price performance.
 
The publication cited Puma’s increased shares, Under Armour’s diminished share value, and the German sportswear brand’s social media strategy as how Puma was able to outperform Under Armour, and there are several more factors involved.
 

First, Puma has capitalized on the athleisure trend that continues to be hot among consumers, while Under Armour products tend to be driven by performance than by dressing casually. Puma’s sales began to increase almost immediately after it began partnering with Rihanna for the Fenty x Puma collection, and the momentum continued through partnerships with Kylie Jenner, Cara Delevingne, and The Weeknd.
 
The Baltimore-based company did follow up with the Under Armour Sportswear line with Tim Coppens to penetrate the designer collaboration and athleisure markets, but the company joined the fray much too late. Puma is a step ahead in the athleisure segment, led by the partnership with Rihanna, and it has been a driver of its sales growth.

The Kering Group sportswear brand beat its forecasts to end 2016 with sales rising 9% to over $1 billion. The European, Americas and total footwear segment sales increased 10.4%, 9.9% and 15.3%, respectively, and according to NPD, the brand tripled its share of the US casual sportswear market. Under Armour, on the other hand, posted a 12% increase in revenue, its slowest growth in 8 years, and a 5.9% increase in net sales in the fourth quarter, which is well below its average of 24% that dates back to 2013.
 
Under Armour provides athletic apparel that matches the athleticism of its athlete roster, which includes Tom Brady, Stephen Curry, Misty Copeland, and Dwayne Johnson, but the products fail to match the athletes’ star power or cool factor. Puma may lean on its strong Fenty x Puma collection and athleisure business, but it has not turned away from its performance category altogether. Usain Bolt proved that Puma products perform as well as they look by winning Olympic gold in Puma Spikes during the 2016 Summer Games in Rio.

 
Controversy harmed Under Armour at the beginning of 2017 as well. Despite Tom Brady leading the New England Patriots to another Super Bowl win to start the year, marking as his fifth career Super Bowl win, the accolade was quickly overshadowed by backlash Under Armour CEO Kevin Plank received from the public for remarks that were perceived to be pro-President Trump. Curry, Copeland and Johnson denounced Plank’s stance, which resulted in the CEO issuing a statement clarifying his words about the President of the United States.
 
Puma excels on many facets, but most importantly the brand has room to grow. Under Armour does not have the same luck, but it did not achieve its great success on a fluke. With Nike, Adidas, Reebok and other athletic companies fighting for market share, there's no telling who will emerge on top tomorrow.