Adidas reported a 93% plunge in first-quarter profit and sales off 19%, missing forecasts, and warned of a deeper hit to second-quarter revenue as lockdowns forced the German sportswear maker and other retailers to close stores. First-quarter operating profit fell to 65 million euros, well short of the 263 million expected by analysts.
Adidas said it had taken a hit of around 250 million euros on unsold stock in greater China, purchase order cancellations and higher bad debt provisions.
Sales fell 19% to 4.75 billion euros versus 4.85 billion forecast by analysts, Refinitiv Eikon data showed, and the company warned of a possible 40% fall in the seond quarter.
Adidas shares were down 1.2% in early trade and have fallen more than a third since the coronavirus pandemic started. It said it could not provide an outlook for the year given the uncertainty over when closed stores might reopen.
Adidas said more than 70% of its stores were currently closed worldwide, with a 35% rise in e-commerce in the first quarter only partially offsetting that.
In the first three weeks of April, it said sales in China had continued to recover as stores reopened there. Rival Nike Inc last month beat estimates for its third quarter ended Feb. 29, with revenue up 5.1% as strong online demand offset lower sales in China.
Adidas said it had a cash position of 1.975 billion euros at March 31. It received approval for a 2.4 billion euro government-backed loan on April 14 to help it through the crisis and is reportedly planning a bond to replace it.