• Loading stock data...
Sunday, February 9, 2025

Adidas Unscathed by Euro Postponement, Possible Olympics Cancellation

  • Apparel maker estimated only $55 to $77 million in revenue losses if the coronavirus impacts both events.
  • European Championships sales already reflected in fourth-quarter financial performance.
Credit: Tim Groothuis/Witters Sport via USA TODAY Sports

This summer’s European Championships became the latest sporting event to fall victim to the coronavirus on Tuesday.

UEFA has officially pushed the international soccer tournament back until next summer, following its suspension of the Champions League and Europa League last week due to the pandemic outbreak.

While the long-term impact of Coronavirus on Adidas’ business remains unknown, the postponement of the Euros will not be as substantial to financial performance as analysts believe.

Much of the sales derived from the event occur in the months before a ball was kicked, CEO Kasper Rorsted told shareholders on the company’s fourth-quarter earnings call last week.

The cancellation of the 2020 Tokyo Olympics offers up a similar scenario. The company believes that consumers will continue to buy footwear and jerseys, regardless of the events taking place. 

“When it comes to the two activities [events], a lot of the sales have already taken place,” Rorsted said. “So actually, the event itself is not the primary transaction place. It is prior to the event, and that’s why a lot of the product sales are taking place prior.”

While many international brands use the European Championships to market to soccer fans, Adidas’ relationship with UEFA dates back two decades. 

READ MORE: Brands Pivot On Marketing Efforts Amid Coronavirus Cancellations

The German apparel maker is currently the official match ball provider for the Euros as well as UEFA’s prominent club competitions. Adidas also has long-standing relationships with Spain, Germany, and Belgium’s soccer federations to outfit players on the field.

“We support UEFA’s decision and fully appreciate it,” an Adidas spokesperson said in an email. “The health and safety of all parties involved have absolute priority in such an exceptional situation.” 

Cancellation of the Olympic Games by the International Olympic Committee, coupled with the postponement of the Euros would result in losses of between $50 million and $70 million, according to company estimates. That equates to roughly 0.3% of Adidas’ total revenue in 2019. 

“[The events] have great brand exposure, but that’s the same for all brands,” Rorsted said. “But from a commercial standpoint, the risk related to these two events not taking place is fairly limited.”

READ MORE: March Madness Cancellation Puts Safety Ahead of Substantial Revenue Losses

In November, Adidas CFO Harm Ohlmeyer forecasted that Euro 2020 sales in the fourth quarter would override sluggish company performance in its home market to that point. After witnessing a decline in European sales of 1.7% in the first half of its fiscal year, Adidas finished 2019 up 3.1% in total sales (to $6.1 billion) in the region. 

On its March 11 earnings call, Adidas said that it would temporarily operate its business in two segments due to coronavirus – China and the rest of its markets. Company guidance expects global sales outside of China to improve between 6% and 8% in its fiscal first quarter. 

Meanwhile, net sales in China are expected to drop by as much as $1.2 billion in the same period. Declines are additionally expected in South Korea ($110 million) and Japan ($1.1 billion). 

Adidas additionally joined Nike and industry distributors like Foot Locker in temporarily closing more stores across North America, Europe, and Asia this week.

Linkedin
Whatsapp
Copy Link
Link Copied
Link Copied

What to Read

Under Armour’s Desired Turnaround Sees Sparks With Q3 Earnings Beat

The 2010s darling has been struggling to find the right formula.
Jan 17, 2025; Dallas, Texas, USA; A view of the shoes of Dallas Mavericks guard Kyrie Irving (11) during the second half against the Oklahoma City Thunder at the American Airlines Center.

China’s Anta Is Fastest-Growing Sneaker Brand on StockX

Nike broke off its shoe deal with Kyrie Irving in 2022.
Jun 20, 2024; Eugene, OR, USA; Detailed view of Nike Alphafly 3 racing flat at the Nike by Eugene store.

‘Stubbornly High’ Inventory Slowing New Nike CEO’s Turnaround Mission

The sportswear giant continues to discount its products heavily.

Adidas-Nike Split Won’t Stop Hunter, Sanders From Collaborating

The college teammates are headed for different professional paths.

Featured Today

Brady and Mahomes

Chiefs Fatigue Is Real. It’s Nowhere Near Patriots Hate Yet

People who have covered both teams say the difference is stark.
Nov 24, 2024; Inglewood, California, USA; Philadelphia Eagles quarterback Jalen Hurts (1) celebrates with running back Saquon Barkley (26) after the Eagles defeat the Los Angeles Rams during the first half at SoFi Stadium.
February 7, 2025

How the Eagles Reinvented Championship Roster Construction

Philadelphia is one of the most innovative franchises in the NFL.
February 3, 2025

‘Ultimate Throwback’: The Unimpeachable Cool of Hartford Whalers Gear

Nostalgia and street cred have driven a consistent frenzy for merch.
January 20, 2024; Santa Clara, CA, USA; Kristin Juszczyk, wife of San Francisco 49ers fullback Kyle Juszczyk (44), before a 2024 NFC divisional round game against the Green Bay Packers at Levi's Stadium.
February 1, 2025

The New WAGs: Sports Wives Building Business Empires

Athletes’ wives and girlfriends are bucking stereotypes and cashing in.
FIFA

Saudis Awarded 2034 World Cup in Uncontested Vote

Saudi Arabia was the only option after Australia decided not to bid.
May 20, 2024

Top Sports Business Jobs This Week (May 2024)

Each week, our staff combs through the thousands of job listings from…
The stands at the Solheim Cup
September 13, 2024

LPGA Apologizes for Solheim Cup Fan Bus Debacle That Left Stands Half-Empty

The USA-Europe women’s team golf event teed off Friday morning.
Sponsored

How UBS Crafts Impactful Partnerships Across Sports, Arts, and Culture

As UBS continues to expand its impressive array of sports and entertainment partnerships, the company solidifies its position as a leader in wealth management.
October 3, 2022

Real Madrid President Renews Call for Super League

Real Madrid’s president believes that soccer is losing ground.
August 10, 2022

PGA Tour Touts Projected Earnings to Keep Players

The PGA Tour is asking its players to consider their potential futures.
August 10, 2022

Bayern Munich to Make Growth Push in U.S. Market

Bayern Munich is looking to expand its reach in the U.S.
Nintendo-logo
August 3, 2022

Nintendo Profits Underwhelm, Switch Sales Decline

Nintendo failed to meet expectations in the company’s latest earnings report.