Despite a 35% sales decline and $394 million quarterly loss, Adidas expects to return to profitability in the third quarter. At the root of the bullishness: a 93% jump in online sales.
Shares were up 1% yesterday as a sales decline was expected given the COVID-19 pandemic has closed stores across the globe. The boost in e-commerce accounted for more than a third of the company’s sales in the quarter.
Nike and Under Armour recently released their quarterly earnings, both also reporting significant upticks in e-commerce activity. There is no indication at the moment Adidas will make a considerable shift in strategy to capitalize on the boom, as Nike recently announced. Adidas CEO Kasper Rorsted has, however, expressed the importance and focus on e-commerce in the past.
The pandemic has accelerated e-commerce growth, with U.S. online retail sales expected to reach nearly $710 billion in 2020. Should that play out, it would be 14.5% of total U.S. retail sales, up from 11% in 2019 — the single biggest leap in online retail share in one year.
Sports Apparel Most Recent Quarterly Revenues:
Nike: $6.3 billion, down 38% year-over-year
Adidas: $4.24 billion, down 35%
Under Armour: $708 million, down 41%
Lululemon: $651.96 million, down 17%