Sportswear giant Adidas suffered a 97 per cent decline in its net profit for the first quarter of 2020 due to the coronavirus pandemic.
With more than 70 per cent of its outlets currently closed as a result of the global health crisis, the German outfit reported net profits for the period of €20 million (US$21.5 million) compared to €631 million (US$681.3 million) a year ago.
“Our results for the first quarter speak to the serious challenges that the global outbreak of the coronavirus poses even for healthy companies.”Kasper Rorsted, chief executive officer, Adidas
On a positive note, the company realised 55 per cent growth in e-commerce revenue in March and a 35 per cent uptick for the first quarter overall. Notwithstanding, the pickup in online activity could not stop revenue for the period from declining 19 per cent to €4.75 billion.
Adidas also said its revenues from China, the epicentre of the COVID-19 outbreak, after recording a 58 per cent first-quarter sales decline in that country.
However, the company warned that second-quarter earnings could suffer an even bigger hit, falling by as much as 40 per cent.
“Our results for the first quarter speak to the serious challenges that the global outbreak of the coronavirus poses even for healthy companies,” Adidas chief executive Kasper Rorsted noted.
He however undercored his confidence in the sportwear manufacturer’s long-term prospects despite the ongoing shutdown of a significant part of its business.
“Consumers are developing an increased appreciation of well-being,” he said. “They want to stay fit and healthy through sports.”