Wednesday 10 March 2021 7:38 am

Adidas returns to growth but warns of Reebok sale costs

Adidas today reported a return to sales growth in the final quarter of the year, but warned of a hit to profit caused by its decision to divest the Reebok brand.

The German sports giant reported sales growth of one per cent on a currency-neutral basis in the fourth quarter to €5.5bn (£3.9bn).

This came as sharp growth in ecommerce and a double-digit rise in its direct-to-consumer business helped offset the impact of lockdown store closures. All markets outside Europe posted growth in the quarter.

Net profit during the period was €138m, down from €181m the year before.

Adidas gave an upbeat outlook for the year ahead, forecasting a mid to high-teens increase in sales. The firm said 95 per cent of its stores have now reopened.

The sports brand said it expected operating margin to rebound strongly to between nine and 10 per cent, with net profit set to increase to between €1.25bn and €1.45bn.

However, Adidas warned of a €250m hit to operating profit as a result of costs linked to its decision to divest Reebok.

Adidas last month confirmed plans to sell or spin off the underperforming brand, which it bought for $3.8bn in 2005.

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