Updating investors on the effects of the coronavirus on its business, Adidas said that it performed well in China during the first three weeks of 2020 but has since suffered a decline of about 85 percent as compared to the same period of last year.
A number of the German brand’s own stores and franchises in the country have closed, and traffic is down sharply at those that have remained open. Adidas operates 500 own stores in China, which account for about 4.2 percent of the number of doors that it operates directly around the world. Store traffic is down in neighboring Japan and South Korea as well, but the company is reporting no material effect on its business there so far. Adidas’ results for the fourth quarter and the full 2019 financial year are due for release on March 11.
Nike has also closed many stores in China as well because of the deadly epidemic, but it has not yet quantified the damage publicly. Two big Chinese sporting goods companies, Anta Sports Products and Xtep, have issued profit warnings. Observers feel that Chinese consumption of sporting goods and other items will rebound after the outbreak is quashed, as it did when the SARS epidemic swept through China in 2003.
In reporting its results for the fourth quarter of 2019 and the full year, Puma’s management said it expects China’s coronavirus outbreak to hit its sales and profits in the first quarter of this year but it still hopes to reach its targets for 2020. The management revealed that more than half of its stores in China were temporarily closed and a drop in Chinese tourism was also hurting other markets.
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