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Adidas closes 2020 with sales slumping despite upswing in online retail, pins hopes on 2021

Adidas was able to recover a bit from the consequences of the Corona pandemic in the fourth quarter of 2020. Above all, the online business grew. The increase amounted to 43 percent.
The sporting goods manufacturer posted a slight increase in sales on almost all continents. Only in the European market did it decline by a full six percent.
This year, the group expects growth of up to 19 percent and a profit that should be between 1.25 and 1.45 euros. The US subsidiary Reebok is to be sold.
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Adidas has published its figures for the fourth quarter of 2020. Apparently, the Franconian sporting goods manufacturer was able to recover from the Corona crisis towards the end of the year. And this despite the fact that half of all European stores were closed. The traditional company focused more on the online business. With success: sales in online retailing rose by a full 43 percent in the last three months. Over the year as a whole, the increase in this area was as much as 53 percent. Discount campaigns such as Cyber Week have also contributed to this growth.

This enabled the Group to largely offset the impact of the Corona restrictions. The bottom line is an overall currency-adjusted growth of one percent compared to the same period of the previous year. However, in view of the ongoing negative currency effects, total sales fell by five percent to 5.548 million euros. In 2019, it amounted to 5.935 million euros.

Significantly downhill in Europe

Despite the pandemic, Adidas posted slight growth on almost all continents in the fourth quarter. The North American business grew by two percent, while Asia was up by one percent. The company in the Far East benefited in particular from the noticeable recovery of the economy in China. Sales in the Middle Kingdom rose by seven percentage points. Only the European market continued to struggle. Compared to the same period last year, sales here were down six percent. Adidas cites the stores closed due to the Corona measures as the main reason for this.

Adidas looks to 2021 with confidence

With around 95 percent of Adidas' international stores currently open, the group expects sales to increase by around 14 to 19 percent this year, as well as gross margin to recover to around 52 percent. The operating margin is expected to be between nine and ten percent. In addition, profits are expected to be between 1.25 and 1.45 billion euros. This does not include the profits generated with Reebok, as the American subsidiary brand is to be sold this year.

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