Adidas sprints off starting blocks in Q1

9 May, 2021 12:00 AM printer

FRANKFURT: German sportswear group Adidas said Friday it roared out of the 2021 starting blocks with a 20-percent rise in first-quarter sales as profits returned to near pre-pandemic levels.

The Covid-19 crisis had pushed earnings down by three-quarters last year although the Bavaria-based firm still forecast a strong growth path for the coming four years, reports AFP.

For the period from January to March, Adidas said quarterly net profit hit 558 million euros ($673 million), up from 31 million euros a year earlier, while sales came in higher than analysts’ expectations at 5.3 billion euros.

As a result, the arch-rival of US apparel giant Nike was “adjusting our forecasts upwards for the whole of 2021,” chief executive Kasper Rorsted said in a statement.

Adidas had said in February it was looking to sell off its struggling US subsidiary Reebok as part of a five-year turnaround plan.

But the first-quarter performance put group profits back on track towards pre-pandemic levels: in the first quarter of 2019, net profit had amounted to 632 million euros.

Last year saw the bulk of the group’s stores forced to shut owing to virus-related restrictions. But strong e-commerce—online sales were up 43 percent on the same period last year—and direct-to-consumer sales have helped it bounce back.

Sales are expected to advance across the year as a whole by around 20 percent, while underlying net profit was project to reach 1.25-1.45 billion euros after 460 million last year. That figure includes 200 million euros set aside for the cost of divesting Reebok.

Adidas also said an acceleration in sales “will be fuelled by an array of innovative product releases,” as major events such as the delayed football European Championships take place in June-July.

Sales in China, which plunged a year ago as the virus fallout battered the global economy, roared back by 156 percent, while US and European sales were up around eight percent as around half of stores remained closed as a result of the pandemic.