Earnings

Adidas cautious for year end as pandemic returns

Key Points
  • Adidas said third-quarter sales fell by a currency-neutral 3% to 5.964 billion euros ($7.05 billion),.
  • While operating profit fell 12% to 794 million euros, ahead of average analyst forecasts for 5.91 billion and 723 million respectively.
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German sportswear firm Adidas expects sales to return to growth in China in the fourth quarter but predicted an overall sales decline similar to that reported in the third quarter.

Adidas said third-quarter sales fell by a currency-neutral 3% to 5.964 billion euros ($7.05 billion), while operating profit fell 12% to 794 million euros, ahead of average analyst forecasts for 5.91 billion and 723 million respectively.

Adidas said the coronavirus resurgence meant some stores were closing again and shopper traffic was down, but it still expects a similar level of sales decline in the fourth quarter as in the third as long as more than 90% of stores stay open.

It also predicted a return to growth in greater China in the fourth quarter, even though the year-ago period was strong, and said it expects a fourth-quarter operating profit of between 100 million and 200 million euros.

Adidas said sales rose 4% in Europe in the third quarter, but fell 1% in North America and 5% in greater China as initial pent-up demand faded after coronavirus restrictions were lifted. Ecommerce sales jumped 51%.

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German rival Puma reported a strong rebound in third-quarter sales in the Americas and Europe as stores reopened after coronavirus lockdowns and online sales boomed, helped by people exercising more during the pandemic.

"We are even better positioned to benefit from the long-term industry growth drivers accelerated by the pandemic such as health and wellbeing, athleisure and digitization," Adidas Chief Executive Kasper Rorsted said in a statement.

Adidas also said it had replaced a loan it secured during the early stages of the pandemic with state-backed bank KfW with a 1.5 billion euro syndicated loan with partner banks.