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(Bloomberg) -- Puma SE shares plunged after the German sportswear company reported disappointing earnings and pushed back profitability targets in a painful contrast to cross-town rival Adidas AG.

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Puma announced belt-tightening efforts on Wednesday and downgraded its profit margin guidance. The stock fell as much as 19% in Frankfurt trading, the biggest drop in more than two decades.

Chief Executive Officer Arne Freundt is struggling to touch off another era of fast growth at the footwear maker. In the half-decade before he took over as CEO, Puma was on a tear, doubling its revenues thanks, in part, to a clever comeback in sports like basketball and cool points piling up with brand ambassadors like the rapper Jay-Z.

But since Freundt assumed control in late 2022, Puma’s brand buzz has stagnated. The shift in fortunes coincided with the departure of Bjorn Gulden, who left for crisis-rattled Adidas after having led Puma for almost a decade.

Earlier this week, Adidas reported surprisingly robust fourth-quarter earnings, fueled by demand for its retro sneakers. The company’s shares have advanced more than 50% in the past 12 months, while those of Puma have tumbled 19% in that period.

Puma announced cost cuts to reach a goal for its earnings margin before interest and taxes of 8.5% by 2027. That’s a downgrade from the previous guidance, which sought to reach that level as early as 2025, said Grace Smalley, an analyst at Morgan Stanley.

The company cited “personnel expenses” as part of the cost-cutting program, suggesting there could be job reductions, but it didn’t offer details.

Meanwhile, Adidas said in an emailed statement Thursday that it’s reviewing its own organizational structure, which may entail job cuts at its headquarters in Herzogenaurach, where it employs about 5,800 people. The efforts are designed to reduce complexity rather than cut costs, it said. Adidas may slash as many as 500 jobs at the site, Handelsblatt reported.

Retro Trend

Several factors help explain Puma’s and Adidas’ divergent trajectories. For one thing, Freundt has tried to shift the Puma brand upmarket by focusing on selling higher-priced soccer, basketball and running gear. In doing so, he sacrificed some sales by phasing out its offerings of some cheaper merchandise.