Two of the biggest names in the sportswear industry in Puma (ETR:PUM) and Adidas (ETR:ADS) have issued warnings on their trading following the outbreak of the coronavirus.
A few weeks back, it seemed that the coronavirus was spiraling out of control. Millions had been wiped off global equities, stock prices and indices.
Many countries had faced business slumps, and many firms had even closed operations following concerns over the spread of the coronavirus.
Today, Puma announced that the coronavirus will impact sales and profits within the first quarter of its financial year.
The German sportswear firm also announced that it was forced to close more than half its stores in China following the outbreak of the coronavirus.
The decline of Chinese tourism into other global markets has also hindered Puma’s trading, however the firm has taken an optimistic stance saying that they hope to hit 2020 targets despite ongoing issues with the coronavirus.
On a better note, Puma said that fourth quarter sales had surged 18% to €1,=.48 billion, as earnings before interest and tax climbed 47% to €55 million.
Puma chief executive Bjorn Gulden said: “The business in China is currently heavily impacted due to the restrictions and safety measures implemented by the authorities. Business in other markets, especially in Asia, is suffering from lower numbers of Chinese tourists.
“Given the current uncertainty around the virus it is of course impossible to forecast its impact on the business”.
Fellow rival, Adidas also gave a similar warning by saying that its business had been hampered by the coronavirus outbreak.
Adidas said on Wednesday that its business in the greater China region had fallen 85% year-on-year in the period since Chinese New Year.
China is one of Adidas’ and Pumas’ biggest markets, and China accounts for 20% of global adidas sales since 2018.
The coronavirus is continuing to take its toll on global business – however developments are being made and the number of cases are leveling off.
There is still much to do to stop the complete spread of the coronavirus, however the future does seem brighter than what was initially expected, when the first few cases were reported.