Adidas is on a downward slope

Adidas is on a downward slope

If last week, we saw Hermes earnings exceed analyst expectations, Adidas did quite the contrary. The Q1 report isshocking - 96% decrease in income.

The sportswear creator reported today a 19% drop in net sales for Q1, from last year's $5.16 billion (4.75 billion Euros). It happened because the pandemic made it to close 70% of the stores globally.

For the first quarter of 2020, the net income was 26 million Euros, 96% smaller than the same period last year. E-commerce gained over 35% since the lockdown, but it isn’t enough to cover the disappearance of sales in physical stores.

Adidas’ CEO, Kasper Rorsted said that “What we have seen in China in March is growth in our own retail stores, a very strong growth in our e-commerce — we grew 35% for the quarter, we grew 55% globally for e-commerce in the month of March, and we grew even quicker in China — and we are seeing that trend in China continuing in the month of April.” Predictions are made about the second quarter of 2020: the company expects a decline in sales more significant than in the first quarter. They forecast a 40% drop compared to the last year's numbers.

In today's early trade, the share price went up by 3.5%.


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Sources: marketwatch.com, cnbc.com

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The information presented herein is prepared by CAPEX.com and does not intend to constitute Investment Advice. The information herein is provided as a general marketing communication for information purposes only and as such it has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and it is not subject to any prohibition on dealing ahead of the dissemination of investment research.

Users/readers should not rely solely on the information presented herewith and should do their own research/analysis by also reading the actual underlying research. The content herewith is generic and does not take into consideration individual personal circumstances, investment experience or current financial situation.

Therefore, Key Way Investments Ltd shall not accept any responsibility for any losses of traders due to the use and the content of the information presented herein. Past performance is not a reliable indicator of future results.