Adidas's sales are bouncing back faster than expected, with a surge in e-commerce and hot demand for casual items like sandals and yoga pants helping the German sportswear company ride out the coronavirus pandemic.
Store operations are starting to return to normal and the 34% sales drop the company reported for the second quarter beat analysts’ estimates, prompting a rally in the shares.
In the third quarter, revenue will probably fall by a mid to high single-digit percentage from a year earlier, the company said.
After closing 70% of its stores globally because of the pandemic, Adidas is grappling with the new normal between online shopping and physical retail as it seeks to rekindle growth.
With more than nine out of 10 stores open again globally, fewer customers are coming in but more of them are buying.
The stock rose as much as 4.3% in Frankfurt, limiting this year’s decline to 14%.
There’s still too much uncertainty about the pandemic, the pace of shopping in re-opened stores and the global economy to offer a full-year forecast, Adidas said.
While China is seeing double-digit growth again -- in part thanks to lifting lockdowns as early as March -- North America and Latin America are still suffering from disruptions as the coronavirus rages.
With people settling into new routines working from home and working out alone, Adidas is seeing a boom in demand for athleisure products along with running and yoga gear.