German sportswear firm Adidas has said it expects to bounce back to profitability in the third quarter, after it plunged to a big loss in the second quarter when the majority of its stores were closed due to Covid-19 lockdowns.

Adidas reported a second-quarter operating loss of €333 million, worse than the €290 million expected by analysts on sales down 35% to €3.579 billion.

The quarterly loss included Covid-19-related charges of around €250 million, mainly due to an increase in inventory and bad debt allowances, as well as the impairment of retail stores and the trademark of its struggling Reebok brand.

Inventories hit €5.2 billion at the end of June, up 20% from the end of March.

Adidas expects a material improvement in third-quarter sales assuming there are no new major lockdowns, but still down on 2019 by a mid- to high-single-digit rate.

It sees an operating profit of between €600 million and €700 million in the period.

It declined to give an outlook for the full year.

"We are now seeing the light at the end of the tunnel as the normalisation in the physical business continues," Chief Executive Kasper Rorsted said in a statement.

Online sales jumped 93% in the quarter and remained at a very high level even as stores started to reopen, with 92% already back in business, albeit with reduced opening hours.

Rivals Nike and Puma also reported quarterly losses, while Nike saw a 75% rise in online sales.