adidas Earnings Fall Nearly 100%, Even Bigger Losses Predicted for Q2
Sportswear giant adidas have reported that their net income for the first quarter fell 97 per cent to 20 million euros ($21.69 million), with earnings of 13 pence (14 cents) per share. Unfortunately, they’ve also predicted things could get worse in Q2.
Overall, revenues also decreased 19 per cent to 4.75 billion euros ($5.15 billion). However, there is a silver lining: e-commerce accelerated 35 per cent. Team Trefoil describe the platform as ‘the only channel that has remained fully operational in most parts of the world’, but it did little to offset the decline in sales from pandemic-induced store closures.
‘Our results for the first quarter speak to the serious challenges that the global outbreak of the coronavirus poses even for healthy companies,’ said CEO Kasper Rørsted in a statement.
‘I am proud of how our adidas family has been working together to support both our company and our communities. At the moment, we are focused on managing the current challenges and doubling down on the recovery in China and the opportunities we see in e-com.’
Modelling suggests top- and bottom-line declines in the second quarter will be ‘more pronounced’, as sales are predicted to be 40 per cent lower than the prior year period.
‘Despite the current situation, I am confident about the attractive long-term prospects this industry provides for adidas,” Rørsted added.
‘Consumers are developing an increased appreciation of wellbeing; they want to stay fit and healthy through sports. Our focus on accelerating our own retail and digital business will serve us even better in the future.’,
At present, more than 70 per cent of adidas outposts remain closed around the world.