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Adidas reported a 93% drop in first quarter earnings and a 19% drop in sales revenue, which did not meet analyst expectations. In addition, the German sportswear maker warned that it expects a further drop in revenue for the second quarter due to blockades that forced him and other retailers to close their stores, Reuters reports.
Operating profit for the first quarter fell to € 65m, well below analyst expectations of € 263m.
Adidas claims to have suffered a hit of around € 250 million due to unsold quantities of products in China, Taiwan, Hong Kong and Macao due to order cancellation and other factors.
Revenue was down to € 4.75 billion, compared to analyst expectations of € 4.85 billion, according to data from Refinitiv Eikon. The company warned of a possible 40% drop in the second quarter.
Adidas shares registered a 1.2% decline before the start of the trading session, and since the start of the pandemic have lost more than a third of their value.
The German giant said it could not provide a forecast for the year, given uncertainty about when it could reopen its outlets.
Adidas said that more than 70 percent of its stores worldwide are currently out of business, and the 35 percent increase in e-commerce in the first quarter has only partially offset this.
The company revealed that its sales in China continued to recover during the first three weeks of April, as its points of sale in the country recovered.
Last month, rival Nike announced that it had exceeded its forecast for its fiscal third quarter, which ended on February 29. Its revenues increased 5.1% during the period, as strong online demand offset weak Chinese sales.
Adidas claims to have $ 1,975 billion in cash as of March 31. On April 14, the company received a loan from the government to help it overcome the crisis.
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