According to Adidas’ earnings report, the largest manufacturer of sporting goods saw a 15.5% drop in its net profit to €546 million in the third quarter of this year. Notably, in the same period in 2019, this figure amounted to €646 million. In addition, Adidas' operating profit plummeted to €794 million from €897 million.
The company's press release highlights that its revenue fell by 7% to €5.964 billion. Last year, Adidas' revenue totaled €6.41 billion. However, despite financial difficulties, the company's online sales via its own platform soared by 51%.
Analysts suppose that on average, the sportswear giant expected its net profit to be €527.5 million. Operating profit was projected to total €725 million while its revenue was estimated at €5.94 billion. In spite of a slight decline in profit and revenue, Adidas securities dropped sharply on Tuesday, November 10.
To give a new boost to its production, the company has made an agreement with 12 banks to secure a €1.5 billion syndicated loan which will run until 2025.
In the fourth quarter of this year, Adidas forecasts a decrease in revenue by several percent. As for operating profit, it is expected to range from €100 million to €200 million.
The company’s financial management was shattered by new quarantine measures introduced in a number of countries to contain the second wave of COVID-19. Due to partial lockdown, the company had to temporarily close near 93% of its stores. At the end of September 2020, this figure was 96%.
