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“Currency-neutral revenues of Adidas decrease 34% in Q2 2020 due to global coronavirus outbreak

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adidasThe past quarter brought unprecedented challenges for our business as large parts of the world were in lockdown. I’m grateful for the relentless and agile efforts of our teams, which enabled us to take the right actions for our consumers, our partners and the company. We addressed the challenges and went after opportunities, as reflected in our e-com business nearly doubling in Q2,” said adidas CEO Kasper Rorsted. “We are now seeing the light at the end of the tunnel as the normalization in the physical business continues, with the vast majority of our stores being operational again.”

Currency-neutral revenues decrease 34% in Q2 2020 due to global coronavirus outbreak

Adidas recorded a material revenue decline in its physical distribution channels during the second quarter of 2020 as the global coronavirus pandemic caused a very large number of store closures as well as a pronounced traffic reduction within the parts of the store fleet that were reopened. At the same time, the company experienced exceptional growth in online sales, which accounted for more than one-third of its total business, through its own as well as partners’ e-commerce platforms. Sales through the company’s own e-commerce channel increased by 93% during the quarter. In total, second-quarter revenues decreased 34% in currency-neutral terms. While sales at brand adidas declined 33% in the second quarter, Reebok revenues were down 42%, reflecting the brand’s higher exposure to the U.S. market. In euro terms, revenues decreased 35% to € 3.579 billion (2019: € 5.509 billion).

Major developments during the pandemic:

 

  • Global coronavirus pandemic causes closure of over 70% of adidas’ stores at high point
  • DTC sales up slightly, driven by 93% currency-neutral e-com growth
  • China revenues flat for the quarter, reflecting double-digit growth in May and June
  • Overall revenues down 34% currency-neutral
  • Operating loss of € 333 million includes around € 250 million coronavirus-related costs
  • Cash position stable at € 2.0 billion as effective cash measures prevent outflows
  • Business trends improve toward quarter-end and into Q3
  • Q3 outlook implies operating profit improvement of around € 1.0 billion compared to Q2
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