Business

Adidas expects profit rebound as COVID-19 shakes up fashion world

Coronavirus-fueled office closures have provided a surprising boost to Adidas, which on Thursday announced it expects to return to profitability in the third quarter as more customers dress down as they work from home.

The German sportswear giant’s CEO told reporters that customers in the 18-34 age group say they plan to spend more time working out as a result of the pandemic, and that daily fashion is changing as companies allow employees to work remotely.

“The work environment will have changed forever,” Kasper Rorsted said.

One of the biggest beneficiaries of the pandemic? Adidas’ affordable Adilette bath sandals — which start at around $20 — and saw sales jump threefold since the beginning of the pandemic in March, the company said.

The Nike rival took a significant hit in the first half of the year as most of its retail stores were closed, and high-profile sporting events like the Olympics and European soccer championships were postponed.

But Rorsted said the company already returned to growth in its home market Germany last month and it expects a recovery in third-quarter sales assuming more than 90 percent of stores stay open, with the fall compared to 2019 set to be less than 10 percent.

A second-quarter operating loss of $396 million was bigger than average analyst expectations, while a sales decline of 35 percent to $4.2 billion, beat forecasts.

Shares in the company, which are down 17 percent this year, were up 4 percent, the biggest German blue-chip gainer.

With Post wires


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