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Adidas says China sales back to growth faster than expected
[BERLIN] German sportswear firm Adidas said on Thursday that sales had returned to growth in greater China faster than it had expected after the coronavirus lockdown, while the reopening of business in Europe and the Americas was going more gradually.
Adidas stuck by guidance it gave in April for at least a 40 per cent fall in second-quarter sales and a drop in operating profit of more than 100 million euros (S$156.7 million) and said it would give more details with results due on Aug 6.
Jefferies analyst James Grzinic said the news that China was rebounding ahead of the company's expectations meant that the group's second-quarter sales decline would be close to the 40 per cent mark, rather than a bigger drop he had previously expected.
Adidas shares were up 1.8 per cent at 7.28am GMT.
While traffic to its stores in greater China stayed below that of last year in May, Adidas said that was more than offset by a rise in how much shoppers were spending and a surge in e-commerce sales, leading to an overall increase in revenue.
Rival Nike also said last month that shopper traffic was still down in China.
Adidas said it now expected second-quarter sales for greater China to be around the same level as last year. Adidas had said in April it only expected a full recovery in the region by the end of the second quarter.
Before the coronavirus pandemic, greater China had been the company's most profitable region and the fastest growing, expanding sales 15 per cent in 2019.
It said about three-quarters of its stores had reopened in Europe, although with most operating at reduced hours. About half in Russia are open again, but fewer than half its stores in the Americas are back in business.