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Adidas reports strong finish to 2020 but warns of Reebok sales hit

However, Adidas warned that it expects to witness a €250m (£214m) hit to operating profit as a result of its decision to divest Reebok

Adidas has reported a “strong finish” to 2020, however warned that its profits may be impacted by its decision to divest the Reebok brand. 

The german sports retailer reported a 1% sales growth on a currency-neutral basis in Q4 to € 5.55bn (£3.9bn). 

Adidas also saw its e-commerce sales grow 53% in 2020, as consumers were forced to turn to online shopping due to Covid-19 restrictions. 

The company, which sells its goods globally, said that all markets except Europe posted sales increases in the fourth quarter – with revenues in Europe declining  6% in Q4.

Looking ahead into 2021, Adidas said that it expects sales to increase at a “mid to high-teens rate on a currency-neutral basis”. Currently, the company’s global store opening rate is above 95%. 

The company also expects its gross margin to almost fully recover and reach a level of 52% in 2021. Net income from continuing operations is projected to increase to a level of between € 1.25bn (£1.07bn) and € 1.45bn (£1.24bn). 

However, Adidas warned that it expects to witness a €250m (£214m) hit to operating profit as a result of its decision to divest Reebok. 

Last month, the group announced plans to begin a formal sales process for the brand, as it looked to concentrate further on strengthening the leading position of its core brand.

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