Adidas sales fell 34% in the second quarter to $4.24B while the company reported an operating loss of $394.49M, but the German sportswear brand "expressed cautious optimism about developments for the rest of the year," according to Cathrin Schaer of WOMEN'S WEAR DAILY. Online sales "surged at a triple-digit-rate at the height of the global lockdown in April and May." Now that physical stores are open again, digital sales "resumed double-digit growth." But overall, Adidas indicated that it had seen 93% "growth in e-commerce during Q2, accounting for a third of all of Adidas' sales in the period." The coronavirus lockdown during Q2 "meant that Adidas ended the first half of the year 26.9 percent down," with sales of $9.87B. Although Adidas' results were "slightly worse than predicted by market analysts," the company did "slightly better than major rival, Nike, in its last reported quarter" (WWD.com, 8/6). The WALL STREET JOURNAL's Ruth Bender notes Adidas experienced the "sharpest drop in sales in Latin America and emerging markets, where they fell over 60% in the quarter." Adidas said that sales in North America "fell 38% and by 40% in Europe." In Greater China, its "biggest individual market, sales were flat in the quarter." Adidas said that it "expects sales to improve materially in the third quarter but to still be down at a mid-to-single-digit rate compared with the same period last year" (WALL STREET JOURNAL, 8/6).
COLLABORATIVE APPROACH: SW Retail Advisors President Stacey Widlitz noted for Adidas and other apparel companies, "The good news is a lot of these brands were very proactive, and they canceled orders. They said to their wholesale partners -- which by the way like a Kohls or department store typically lead with promotions -- and said, ‘Let’s all just reset and sell what you have and we revisit it in the fall.’ So everybody is working together to keep inventory under control” (“Street Signs,” CNBC, 8/6).
