Adidas is one of the companies that were hit early by the Corona crisis: Almost nothing went on in the important Chinese market in January. The pandemic struck the world's second largest sporting goods company for the entire first quarter.
Herzogenaurach (dpa) - The sporting goods manufacturer Adidas suffered financially in the first quarter due to the corona pandemic: sales and profits plummeted, as the company announced in Herzogenaurach on Monday.
Profit from continuing operations, the key measure at Adidas, lost 97 percent to just € 20 million. Adidas expects even more severe slumps in the second quarter. The company expects to then operationally slip into the loss zone.
At 65 million euros, the operating result in the first quarter was only a fraction of the 875 million euros achieved in the previous year. Order cancellations, for example, had a negative impact here.
Sales decreased by 19 percent to 4.75 billion euros. In the first two months of the year, the economic effects of the Corona crisis had a particularly negative impact on business in Asia and especially in China - the second most important single market for Adidas after the USA. Adidas posted sales losses of 800 million euros or 58 percent there. From mid-March the crisis spread to other markets around the world.
Currently, more than 70 percent of the stores are closed, Adidas said. Adidas expects sales to fall more than 40 percent in constant currency from April to June.
The sales trend in China has gradually recovered in the first three weeks of April. According to Adidas, revenue in the online business also increased significantly - by 55 percent in March. However, this cannot compensate for the loss of sales from the shop closures. Because of the continuing uncertainties, Adidas has decided against an outlook for 2020. The group had withdrawn its original forecast due to the economic consequences of the Corona crisis.
The company had responded with countermeasures weeks ago. A planned share buyback program with a volume of around one billion euros was stopped. The board of directors and the extended management waived some of their remuneration. The federal government granted a syndicated loan under the leadership of the state development bank KfW of up to three billion euros.