German sportswear makers Adidas and Puma warned on Wednesday of a major decline in sales in China due to the coronavirus and said while there were early signs of improvement there the impact had spread to other markets, CNBC reports.
Shares in Adidas and Puma, already pummeled in the last few weeks, were down 6.3% and 3.8% respectively by 0830 GMT. Adidas stock was at one-year lows.
Adidas said it expected first-quarter sales to drop by up to 1 billion euros ($1.14 billion) in greater China and operating profit to decline by between 400 million and 500 million.
“The virus hit looks worse than feared,” Jefferies analyst James Grzinic wrote in a note.
Puma said it no longer expected its business would return to normal soon, despite encouraging signs coming out of China, adding it was abandoning the 2020 guidance it gave on Feb. 19 that had assumed the crisis would be short lived.
“Given the duration of the situation in China, the negative impact in other Asian countries and now also the spread to Europe and the U.S., we unfortunately have to conclude that a short-term normalization will not occur,” Puma said.
Adidas and Puma make almost a third of their sales in Asia, which has been a major growth market for the sporting goods industry in recent years. The region is also the main sourcing hub, with China a major producer for both companies.
Since emerging in China late last year, the new coronavirus has spread around the world, inflecting around 120,000 people, killing nearly 4,300 and sending markets into a tailspin.
