Adidas Predicts $1 Billion USD Chinese Sales Decline Due to Coronavirus

Competitors PUMA and Nike have already faced tanking share prices.

Footwear 
11,350 Hypes 5 Comments

Following early hints of financial fear, adidas has confirmed investors’ Coronavirus (COVID-19) concerns, reports Reuters. The German sports giant is hit even harder than its rivals Nike and PUMA, though none of the companies are entirely unscathed.

adidas shares were down 10% on March 11, following a steady decline over the past few weeks, when the company announced expectations of a €1 billion EUR (approximately $1.1 billion USD) sales drop in greater China due to Coronavirus interference, accompanying a €100 million EUR (approximately $111 million USD) drop in Japan and South Korea. Chief Executive Kasper Rorsted explained to analysts that higher-margin China business is usually a major contributing factor to the company’s overall profits. However, adidas also reported that it reopened nearly half of its 12,000 Chinese stores that have been closed since January 25.

With various major sporting events postponed, canceled and quarentined, adidas may be in for rougher waters still. Rorsted noted that if the Tokyo Olympics and Euro 2020 were canceled, adidas may lose up to €70 million EUR (approximately $78 million USD) in sales — the latter event is a particularly big sales driver — but he remains positive about adidas’ underlying health and isn’t considering any job cuts.

Meanwhile, Nike has seen a 3% dip, while PUMA is down by about 3.2%. Initially, PUMA remained confident that business would soon normalize, but recently forecast less optimistic results. “Given the duration of the situation in China, the negative impact in other Asian countries and now also the spread to Europe and the U.S.,” PUMA said in a statement. “We unfortunately have to conclude that a short-term normalization will not occur.”

In slightly more optimistic news, adidas predicted currency-neutral sales to increase by 6%-8% in 2020 overall, with a rise in operating margin from 10.5%-11.8%, though this is based on a return to normal business in the latter portion of the year.

Meanwhile, more events have been canceled over social distancing aims: the tech-centric E3, Coachella 2020 and Baselworld.

Read Full Article

What to Read Next

adidas Bans Sale of German Football Kits With Number 44 Due To Nazi Symbolism
Sports

adidas Bans Sale of German Football Kits With Number 44 Due To Nazi Symbolism

Many pointed out the numbers’ similarities to the Nazi Schutzstaffel (SS) Armanen rune symbol.

Valve Earned Nearly $1 Billion USD From 'Counter-Strike' Loot Boxes In 2023
Gaming

Valve Earned Nearly $1 Billion USD From 'Counter-Strike' Loot Boxes In 2023

A very successful year for the video game developer.

adidas Beats Expectations With 8% Sales Increase in Q1 2024
Fashion

adidas Beats Expectations With 8% Sales Increase in Q1 2024

Sales of the label’s remaining Yeezy inventory accounted for roughly €150 million EUR in revenues.


The adidas AE 1 Low "Mural" Set To Arrive Later This Summer
Footwear

The adidas AE 1 Low "Mural" Set To Arrive Later This Summer

Take a look at the upcoming colorway here.

Pixar Shares Official Trailer for 'Soul' Starring Jamie Foxx
Entertainment

Pixar Shares Official Trailer for 'Soul' Starring Jamie Foxx

Slated to hit theaters this June.

Porsche Design Releases 1919 Chronotimer Flyback Watch in Dark Blue Edition
Watches

Porsche Design Releases 1919 Chronotimer Flyback Watch in Dark Blue Edition

Priced at $6,350 USD.

Kehlani Returns With Another Break-Up Anthem "Toxic"
Music

Kehlani Returns With Another Break-Up Anthem "Toxic"

Singing about the addicting nature of saying goodbye.

Off The Hook x Reebok Electro 3D 97 Inspired By Montreal's Harsh Weather
Fashion

Off The Hook x Reebok Electro 3D 97 Inspired By Montreal's Harsh Weather

OTH celebrates its 20th anniversary in style.

Aro Archive Is Paving the Way for Pre-Owned Luxury
Fashion 

Aro Archive Is Paving the Way for Pre-Owned Luxury

How the London-based collective tells human stories through fashion.


Melody Ehsani x Air Jordan OG Celebrates Women's Basketball
Footwear

Melody Ehsani x Air Jordan OG Celebrates Women's Basketball

Drawing inspiration from the WNBA and the 20th anniversary of ‘Love & Basketball.’

Deb Never Backyard Wrestles in New Music Video for Kenny Beats-Produced "Stone Cold"
Music

Deb Never Backyard Wrestles in New Music Video for Kenny Beats-Produced "Stone Cold"

Deb kicks off her tour in support of Mura Masa this April.

Aimé Leon Dore Details Collaborative SS20 New Balance Apparel
Fashion

Aimé Leon Dore Details Collaborative SS20 New Balance Apparel

Premium running and lounge-wear ideal for the bespoke 827 sneaker.

Above The Clouds Celebrates 10 Years With ASICS GEL-1090 Collaboration
Footwear

Above The Clouds Celebrates 10 Years With ASICS GEL-1090 Collaboration

A subtle nod to ASICS’ “Sound Mind, Sound Body” philosophy.

The Killers Announce New Album With "Caution" Single
Music

The Killers Announce New Album With "Caution" Single

Featuring a guitar solo from legendary Fleetwood Mac member Lindsey Buckingham.

More ▾
 
We got you covered. Don’t miss out on the latest news by signing up for our newsletters.

By subscribing, you agree to our Terms of Use and Privacy Policy.