Sporting goods group Adidas has started the year extremely well, with a reported increase in sales of 20%. Especially the footwear division did very well.
Direct sales increasingly important
The increase in sales in the first quarter was driven by a spectacular improvement in direct-to-consumer (DTC) revenues, which rose by 31% and accounted for more than a third of total sales. E-commerce sales even increased by 43%. In two years' time, the German concern has thus almost doubled its online revenues.
Adidas mainly sold more shoes. Revenues in that segment grew by 31%, driven by increasing demand in the categories running, training, outdoor and lifestyle. Corona boosted activities like walking and hiking, which is also reflected in these results. The sportswear giant's total sales rose by a fifth to 5.27 billion euros.
Asia on top
Geographically, growth came mainly from Greater China (+156% on a currency-neutral basis) followed by Latin America (+18%). Europe was most affected by store closures, but still managed to post growth of 8%. At the end of the quarter, 89% of stores worldwide had reopened.
Adidas reported an operating profit of 704 million euros versus 48 million euros a year ago. This was partly due to lower marketing and point-of-sale costs. Physical marketing activities remain restricted in many parts of the world. The sports brand's operating margin is almost back to pre-pandemic levels.
The German group expects an increase in turnover of approximately 50% in the second quarter. This is of course due to the weak basis for comparison, but the company is also planning a series of innovative product launches. Major sports events, including the European Football Championship and the Copa America, offer unique opportunities to draw even more attention to the brand.