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May 10, 2021updated 07 Nov 2021 11:43am

Adidas records 27% growth in first-quarter revenues

Multinational sportswear retailer Adidas has reported a 27% rise in currency-neutral revenues to €5.27bn in the first quarter of this year, compared to €4.4bn in the same quarter of last year.

Adidas’ direct-to-consumer (DTC) revenues and e-commerce sales primarily contributed to this growth, with e-commerce sales rising by 43%.

The revenue growth was strongest in terms of worldwide footwear sales, which increased by 31% driven by sales of training, running, outdoor and lifestyle products.

The company’s quarterly net income was €554m, a 2,050.4% increase from €26m in the prior-year period. Net income from the company’s continuing operations reached €502m in this year’s first quarter.

Adidas experienced growth in all its market segments, with a 156% rise in currency-neutral sales in Greater China. Its North America and Europe, Middle East and Africa (EMEA) segments both saw an 8% increase.

The company’s revenues increased by 18% in Latin America and 4% in the Asia-Pacific region.

The company said that extended lockdowns due to the Covid-19 pandemic had negatively affected EMEA sales, with its store opening rate in Europe falling below 50% in March.

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Its operating profit increased to €704m, a surge from €48m in the first quarter of last year.

Adidas CEO Kasper Rorsted said: “We are fast out of the gate in the first year of our new strategic cycle, with excellent revenue growth, DTC-led sales increases in all market segments and strong profitability improvements.

“We upgrade our full-year outlook as we are now even more confident about a strong top-line recovery this year, even though the environment is not yet back to normal.”

Raising its outlook for the year, Adidas said it expects currency-neutral sales to rise by around 50% in the second quarter and at a high-teens rate in the full year.

The company kept its gross margin forecast at about 52% and predicted a 9-10% growth for its operating margin. Net income from its continuing operations is expected to be between €1.25bn and €1.45bn.

Its profitability outlook will include temporary stranded costs associated with the planned sale of Reebok. In the full year, these costs are expected to be €250m on the operating profit level and affect net income from continuing operations by around €200m.

Adidas said that around 30% of the €250m will reoccur next year, while the stranded costs will be eliminated by 2023.