Ever since early March, when the pandemic first started tightening its hold on retail sector across the globe, sales have got hit badly – with many even going bankrupt.
Some have had very bad quarters! adidas, which too had to shut down 70 per cent of its stores during the tough months of March and April, has also had a poor second quarter.
The German sports manufacturer saw its net sales go down by 34 per cent on a currency-neutral basis in Q2 to clock €3.58 billion from €5.58 billion achieved during the same period in 2019.
Total loss for the brand during the second quarter was €330 million and this includes €250 million in coronavirus-related cost.
As far as the gross margin is concerned, adidas saw a slump of 2.4 percentage points to 51 per cent from 53.5 per cent in Q2 of 2019.
So, expectedly it’s not been good for adidas; however there was a silver lining. The brand has seen its online business shoot up by an extraordinary 93 per cent in the second quarter.
What’s notable is that in the months of April and May, the figures even touched three digits. The e-commerce business has been the saving grace for the brand, and understanding this very will adidas now focuses on speeding up its digital business.
As a part of strategic response to this growth, adidas has now raised the digital platform target to €4 billion and also reallocated its resources to ensure there is acceleration.
Going forward, adidas expects business trends to improve in Q3, with operating profit expected to grow by around €1.0 billion compared to what it was in Q2.
adidas, which is a pioneering name in apparels and shoes, generates revenue of €21.915 billion.