Adidas is boosting efforts to regain its North American audience. Despite having a strong third quarter in most areas of the world——net sales increased 6.2% to $5.4 billion——the Germany-based athletic player saw its sales decline 1.4% in North America, and a continuation of its shrinking market share in favor of top ranked Nike and growing Under Armour.
In contrast, Adidas’ sales in Latin American surged 15.8%. Sales were especially strong in Argentina, Brazil and Mexico, thanks in part to lingering World Cup fever.
Herbert Hainer, the company’s executive chief, said Adidas is “aggressively” addressing its challenges and vowed to restore momentum in the U.S. He added, “Regaining our form in this market is the top priority on our group’s agenda.”
Adidas is already putting steps in place to improve growth. Ben Sharpe, who was appointed to lead and restructure the company’s floundering TaylorMade-Adidas Golf business in June, is working toward cleaning up the brand’s excess inventory. Adidas has also also laid down roots in trendy Brooklyn. The company opened a new design studio in the New York borough, which will be stacked with heavy design talent including former Nike mavericks Denis Dekovic, Marc Dolce and Mark Miner in 2015.
In a letter to shareholders Hainer said, “In any sport, to reach your goals, tactics and desire are critical to compete and win. We are here to do both. And while certain external factors have gone against us over the last 18 months, we know we have to raise our game especially in difficult conditions. Over the last months we have acted quickly and urgently, implementing a series of initiative to drive more consistent growth and more profitability for our group.”
One brand that is seeing a rebound is Adidas’ fellow German brand, Puma. The athletic company reported Friday that its third quarter net sales increased 3.7% to $1.1 billion——a better than anticipated result. In fact, its footwear sales were up for the first time in seven quarters.
Puma CEO Bjoern Gulden’s ramped up marketing efforts, complete with a new “Forever Faster” tagline and endorsements by sprinter Usain Bolt and Italian soccer star Mario Balotelli, appear to be working. However, that costly ad and endorsement budget could be cutting into profits. Puma’s net profit dropped 45 percent to $35.9 million. Still, the company revised its outlook for 2014, projecting a low single-digit increase in net sales.
As for 2015, Puma has high hopes for its new gear. Gulden told Reuters, “I am convinced that the product in 2015 is better than in 2014. I am confident that the basis has been laid for the turnaround.”