FRANKFURT: German sportswear group Adidas said today that its profits are down 78% in 2020 after the emerging coronavirus pandemic hit it, but it expects a sharp recovery in the future.
The Bavaria-based company, which is trying to sell its troubled US subsidiary Reebok, said its net profit fell to 432 million euros last year from 1.97 billion euros in 2019.
Sales also saw a 16% drop to 19.8 billion euros.
Adidas, however, sought to highlight that sales recovered in most parts of the world in the last quarter of the year as many of its stores were forced to close due to Covid-19 restrictions.
The exception is Europe, Adidas said in a statement, where nearly half of the company’s stores were still closed at the end of the year.
Sales of the flagship adidas brand are down 13% in 2020, while those of Reebok are down 16%.
Last month, Adidas said it would sell Reebok, which it acquired in 2006 for 3.1 billion euros, with the aim of taking on US rival Nike.
But Reebok has struggled to shine under its German owner, despite notable collaborations with the likes of Victoria Beckham, Cardi B and Ariana Grande in recent years.
Adidas said it launched a formal process to strip itself of Reebok, and the company’s five-year growth strategy introduced today took the brand apart.
One silver aspect of the year of closed stores was that online sales rose by 53% to € 4 billion – more than a fifth of total sales.
With 95% of its stores opening worldwide, Adidas will “quickly exit the gate” in 2021, CEO Casper Rorsted said in the statement.
The company expects sales to grow 15% to 20% over the year, with further increases expected in China, Asia Pacific and Latin America.
Adidas expects net profit of between € 1.25 billion and € 1.45 billion in 2021.
He also suggested paying shareholders a dividend of € 3 per share.