Adidas AG, the global sneaker maker, revealed losses of nearly $400 million in the second quarter (Q2) amid store closures to prevent the spread of the coronavirus.
Business Insider reported that the German-based company saw sales dive by 35 percent to 3.6 billion euros ($4.3 billion) in the quarter. At the same time, Adidas suffered an operating loss of 333 million euros ($394 million).
Adidas said 70 percent of its stores worldwide remained closed because of the pandemic.
The losses came despite what the sneaker giant called “exceptional growth” of its online sales. Its eCommerce platform enjoyed a near doubling of sales in Q2, a 93 percent rise compared to the same quarter last year.
Online sales accounted for more than a third of Adidas’ business, which includes sales through its own website and from its partners. But overall sales of the Adidas brand slipped by a third in Q2.
Reebok, its subsidiary, did not fare any better: Its revenues plunged 42 percent, reflecting the brand’s higher exposure in the U.S.
If Adidas had counted on Q2 sales in China, it was disappointed: Sales there were flat, but grew by double digits in May and June.
CEO Kasper Rorsted said he expects Adidas to be profitable in the third quarter (Q3) if there are no more lockdowns, but that sales would still be down. The company did not provide an outlook for the year due to uncertainty around the pandemic and the pace of recovery in reopened stores.
“From everything we know today, our recovery will continue in Q3,” Rorsted said in a statement. “Where we are open for business, be it in physical stores or in the digital space, consumer demand for our products is high.”
Dan Neiweem, co-founder and principal at Avionos, a Chicago marketing company, told Business Insider that online sales for fitness wear have increased across the board.
“Be it a fear of exposing themselves to COVID-19, a desire to get outside, boredom shopping or the simple fact [that] people want to be comfortable at home in their athleisure wear, we’re seeing an increase in demand for fitness shoes and apparel with the bulk of these purchases being made online,” he said.