Adidas full-year sales slide 14% due to the COVID-19 disruptions

Adidas AG (ETR: ADS) said on Wednesday that signs of recovery were evident in the final quarter of 2020 after a massive hit from the Coronavirus pandemic in the previous months. The company attributed returned to slight growth in Q4 at constant currencies on the back of robust retail and eCommerce sales.

Adidas shares remained almost flat in premarket trading on Wednesday but jumped roughly 4% on market open. Including the price action, the stock is now trading at a per-share price of £251 per share versus a slightly higher £253 per share at the start of the year 2021. The price action should come in handy if you are interested in investing in the stock market.

Adidas reports £192.72 million of operating profit in Q4

Adidas also expressed confidence on Wednesday that its financial performance will improve significantly this year. The sporting-goods company reported £4.75 billion of sales in the fourth quarter that represents a 1% annualised growth after adjusted for currency effects. Analysts, on the other hand, had called for a lower £4.69 billion of sales in Q4.

The German multinational’s operating profit in the recent quarter stood at £192.72 million versus the year-ago figure of £209.86 million. Its operating margin remained almost unchanged at 4.1%. Adidas resumed its dividend at £2.57 per share recently. In 2018, it had paid a higher £2.87 per share.

For the full year, Adidas recorded £367.46 million of net income from continuing operations, compared to a sharply higher £1.64 billion in the previous year. The Herzogenaurach-based company generated £17 billion of annual sales, which translates to a 14% year over year decline.

Adidas expects £1.24 billion of net income in 2021

For 2021, Adidas forecasts up to £1.24 billion of net income from continuing operations. The operating margin, it added, is likely to fall between 9% and 10%. As per the world’s 2nd largest sportswear manufacturer, sales are expected to recover significantly in all geographical areas. Asia-Pacific, Latin American, and Greater China are likely to see the sharpest rebound this year.

In its earlier report published in November, Adidas had posted £486.92 million of net profit in the third quarter.

Adidas remained almost flat on average in the stock market last year with an annual increase of only 3%. At the time of writing, the German multinational sporting goods company has a market cap of £50.11 billion and a price to earnings ratio of 127.06.