Adidas posted losses of nearly $400 million in the second quarter, despite online sales doubling
Adidas posted a second-quarter loss of 333 million euros ($394 million) and a 35% sales decline, as most of its stores remained shut.
Despite a challenging quarter, the sportswear giant saw a 93% jump in online sales as consumers ramped up purchasing from home.
Adidas expects to return to profitability in the third quarter, assuming there are no major lockdowns, it said.
Adidas revealed a big loss on Thursday in a challenging second quarter during which it shut stores because of the coronavirus pandemic.
Sales declined 35% to 3.6 billion euros ($4.3 billion) in the quarter, and the company suffered an operating loss of 333 million euros ($394 million).
The "exceptional growth" of e-commerce was a bright spot: Online sales nearly doubled in the quarter, jumping 93%, and accounted for more than a third of Adidas' total business. The figures include sales through its own website, as well as through those of its partners.
Overall sales at Adidas' core brand fell 33% in the quarter. Reebok, its subsidiary, was even worse off: Revenues plunged 42%, reflecting the brand's higher exposure to the US market.
Adidas sales in China for the second quarter were flat, but grew by double digits in both May and June.
The German sportswear brand said around 70% of its stores worldwide remained closed because of the pandemic, and footfall is way down in those that have reopened.
It expects to return to profitability in the third quarter assuming there are no major lockdowns, although sales would still be down, it said. It did not provide an outlook for the full 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. Where we are open for business, be it in physical stores or in the digital space, consumer demand for our products is high," chief executive Kasper Rorsted said in a statement.
Dan Neiweem, co-founder and principal at Avionos and an e-commerce expert, told Business Insider that online sales for fitness wear were up across the board.
"Be it a fear of exposing themselves to COVID-19, a desire to get outside, boredom shopping or the simple fact 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."