Adidas said today that its direct-to-consumer sales grew in the third quarter of its financial year as customers bought online and as most of its own shops reopened from coronavirus lockdowns. But in its largest channel – wholesale – trade continued lower than at the same time last year.
The update came as the retail brand, ranked Top250 in RXUK Top500 research, said its direct-to-consumer business grew by 13% to account for 35% of total sales in the quarter. Online sales grew by 51%, compared to the same time last year, and there was a “sharp increase” in full price sales. Despite improving from the previous quarter, its wholesale business remained lower than at the same time last year.
Overall, net sales of €5.96bn (£523bn) were 7% down on the same time last year, while net income of €577m (£506.5m) was down by 10.8%. Sales grew in Europe (+3.3% in euros) but fell in North America (-5.4%), Asia Pacific (-10.4%) and Latin America (-26.9%). Sales of Adidas brand products came in at €5.5bn (£4.8bn), down by 7.2% on last time, while Reebok sales of €403m (£353.8m) were down by 12.3%.
Adidas chief executive Kasper Rorsted said the brand had seen a “strong recovery” in its business in the third quarter. “Our focus on healthy inventories, profitable sell-through and disciplined sell-in clearly paid off: inventories declined by more than half a billion euros and our full-price share in e-com increased at a double-digit rate,” he said. “At the same time, we kept costs under control and delivered a profit improvement of more than €1.1 billion (£0.97bn) compared to Q2.”
In the first nine months of the year, which includes the worst effects of the coronavirus pandemic, Adidas group sales fell by 20% to €14.3bn (£12.6bn), while net income from continuing operations came in at €291m (£225.4m), down from €1.7bn (£1.5bn) last time.
Rorsted said: “While at the beginning of the quarter we were on track for growth in Q4, a worsening of the pandemic in many regions of the world is again requiring our patience and support. However, this is not taking us by surprise. Thanks to our prudent approach, we are now well-prepared to cope with these short-term uncertainties.
“At the same time, we are even better positioned to benefit from the long-term industry growth drivers accelerated by the pandemic such as health and wellbeing, athleisure and digitisation.”