Adedapo Adesanya
By Adedapo Adesanya
More companies are beginning to count their losses as a result of the coronavirus outbreak in China and the latest to lick their wounds are German sporting goods manufacturers, Adidas and Puma.
Adidas stated on Wednesday that a significant number of its stores and partner stores were still shut down, and those that were open are suffering a big drop in customer traffic as a result, business activity has plunged by around 85 percent.
According to Adidas, “In view of the daily changing situation, the extent of the overall impact on our 2020 financial year cannot be reliably quantified at this time.”
The company also disclosed that it was recording a drop in the numbers of customers visiting its stores in Japan and South Korea, but says it has so far not been able to quantify the impact of the virus outbreak on business activities outside of China.
The company said it will give more updates on the impact of coronavirus on sales and profit during its annual earnings report in March.
“As the situation keeps evolving on a daily basis, the magnitude of the overall impact on our business for the full-year 2020 cannot be quantified reliably at this point in time,” it said.
One of Adidas’ key competitors in the sport utilities manufacturing industry, Puma, also said that the virus outbreak could be expected to affect sales and profits in the first quarter of 2020 as half of its shops in China are temporarily closed.
It, however, projected that it was still expecting to hit its overall targets for 2020 as currency-adjusted sales growth of around 10 percent and earnings before interest and taxes (EBIT) of between $500 million and $520 million, as well as a significant improvement in net profit.
Adidas and Puma are two on a long list of global brands, including Apple and Starbucks, that have had to shut all or most of their stores as the coronavirus outbreak rapidly spread across China from Wuhan city in Hubei province where it started last year.
Another sport utility merchandise maker, Nike, said last week that in the short term it expected the coronavirus situation to have a material impact on its operations in China but it was on course due to its online business which was still strong.
The latest report of the virus show that the global death toll climbed above 2,000 while the total number of confirmed cases rose to more than 75,000 as at Wednesday, February 19.
