Adidas, global leader in sportswear shoes and accessories, has announced its financials for 2019.
The currency-neutral revenues are up by 6 per cent despite supply chain shortages, which the company had experienced following a strong increase in demand for mid-priced apparels.
In 2019, the company produced over 1.1 billion sports and sports lifestyle products with independent manufacturing partners worldwide and generated sales of € 23.640 billion.
Double-digit sales increased in Greater China and e-commerce operating margin expanded to 11.3 per cent during the said period. The net income from continuing operations grew by 12 per cent to € 1.918 billion (up 15 per cent to € 1.972 billion when excluding negative impact from IFRS 16).
Adidas is sourcing apparels and footwear from more than 30 Indian companies (primary suppliers/Tier 1) including Shahi Exports, Gokaldas Exports, Pearl Apparels, Maral Overseas Ltd., Aryan Apparels and Alpine Apparels. On retail front, the company operates around 700 Adidas and Reebok stores across India.
“In 2020, we will stay focused on the execution of our strategy to bring ‘Creating the New’ home and aim for a sixth consecutive year of double-digit bottom-line growth. Following the outbreak of the Coronavirus, our business in Greater China has experienced a significant negative impact since Chinese New Year. Regardless of the impact on our business, it remains our top priority to ensure the health and safety of our employees and their families,” Kasper Rorsted, CEO, Adidas
The company’s sales increase was driven by a 7 per cent improvement at brand Adidas, reflecting high-single-digit sales growth in Sport Inspired as well as a mid-single-digit gain in Sport Performance.
Direct-to-consumer, including e-commerce, now accounts for one-third of the company’s total business, which was 30 per cent in 2018.
On a currency-neutral basis, the combined sales of the Adidas and Reebok brands were driven by double-digit increases in the company’s strategic growth markets Greater China (18 per cent) – leading to growth of 13 per cent in Asia-Pacific – and North America (10 per cent).
As far as outlook for 2020 is concerned, the company believes the currency-neutral sales to increase between 6 per cent and 8 per cent and operating margin to increase between 11.5 per cent and 11.8 per cent. Outlook for 2020 does not reflect any impact of Coronavirus outbreak in China.