Adidas posted a 93% drop in Q1 profit and sales off 19%, missing estimations, and warned of a deeper hit to Q2 income as lockdowns forced the German sportswear maker and different retailers to shut stores.
Q1 working revenue dropped to 65 million euros, well short of the 263 million expected by analysts.
Adidas stated it had taken a hit of around 250 million euros on the unsold stock in China, purchase order cancellations, and higher bad debt provisions.
Sales plunged 19% to 4.75 billion euros versus 4.85 billion forecasts by analysts, Refinitiv Eikon data confirmed, and the company warned of a possible 40% plunge in Q2.
Adidas shares have been down 1.2% in early trade and have plunged over a 3rd since the coronavirus pandemic began.
It stated it couldn’t provide an outlook for the year given the ambiguity over when closed outlets may reopen.
Adidas stated over 70% of its stores had been currently closed around the world, with a 35% spike in e-commerce in Q1 partially offsetting that.
In the first three weeks of April, it stated sales in China had continued to recuperate as stores reopened there.
Competitor Nike in March beat forecasts for Q3 ended February 29, with revenue up 5.1% as strong online demand offset lower sales in China.