Business Performance
While adidas recorded strong operational improvements in 2020, exceptional growth in e-commerce could only partially compensate for temporary physical store closures. Revenues decreased 14% on a currency-neutral basis, reflecting double-digit declines at both the adidas and Reebok brands. Revenues in Russia/CIS remained flat, while currency-neutral sales were down in all other major market segments. The gross margin decreased 2.3 percentage points to 49.7%. Other operating expenses as a percentage of sales were up 4.9 percentage points to 46.5%, predominantly due to higher overhead expenses as a percentage of sales. The company’s operating margin decreased 7.5 percentage points to 3.8%, reflecting the decrease in both gross margin and other operating expenses as a percentage of sales. The financial results were significantly impacted by the negative effects of the coronavirus pandemic. Net income from continuing operations decreased 78% to € 429 million. This translates into basic EPS from continuing operations of € 2.15, representing a decrease of 78% versus the prior year period.
Operating overhead expenses
Expenses which are not directly attributable to the products or services sold, such as distribution and selling as well as general and administration costs, but not including marketing and point-of-sale expenses.