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In late February, REI Co-op alerted members that it didn’t post a profit and therefore wouldn’t issue an annual dividend. This week, REI revealed the details of the financial toll that COVID-19 took on its top and bottom lines in 2020—and the impact was significant.

For the full year, the co-op reported revenue of $2.75 billion, down 11.8 percent from 2019. It also posted a loss of $34 million, down from a $21 million profit last year.

REI’s sales sinking to 2018 levels and net income plummeting $55 million are understandable, of course, given the headwinds of Covid and the co-op’s decision to temporarily close stores and furlough many employees last spring.

But as much as the yearly results sting, REI’s pandemic pivots are paying off, according to Eric Artz, the co-op’s president and CEO.

“We entered 2020 with incredible momentum, after more than a decade of record growth,” he said. “Then, the entire world came to a halt. We regrounded ourselves in our values, making choices that at times came at great cost to our business. But we took the long view and continued to put our people first, quickly pivoting to find new ways of serving our customers and community. That approach turned out to be the right thing for our people and for our business, and allowed us to enter 2021 not just in a position of financial strength, but proud of who we were when the times were least certain.”

REI Compared to Other Outdoor Retailers

REI wasn’t alone in an uphill climb once lockdowns were lifted and retailers could reopen. Reduced hours and fewer customers allowed inside stores took a toll on most businesses across the industry. But by way of comparison, the co-op’s sales decline was much steeper than the independent outdoor specialty retailers of Grassroots Outdoor Alliance.

Grassroots published its 2020 sales report on February 17, which showed that member stores’ 2020 sales dipped just 0.34 percent compared to 2019—not bad when compared with REI’s nearly 12 percent decline.

And in the first quarter of 2021, sales for Grassroots members were up 34 percent from the year-ago period. Granted, many retailers will see favorable comps for March and April due to last spring’s shutdowns, but on a rolling 12-month basis, Grassroots members’ sales have grown 8 percent.

That doesn’t mean retailers can rest easy, though, says Rich Hill, president of Grassroots Outdoor Alliance. Many challenges remain, including delayed shipments and a severe supply-demand imbalance.

“The data is totally accurate, but should still be viewed with cautious optimism,” he said. “Coming from the depths of the shutdown to robust outdoor demand paired with widespread supply chain issues, we’re clearly headed into a pretty crazy data phase in the outdoor sector.”

REI Compared to the OBJ Outdoor Index

REI’s double-digit sales decline was in line with many of the companies that compose the OBJ Outdoor Index, our custom financial chart that tracks the stock performance of 25 publicly traded companies with one or more outdoor brands in their portfolios.

OBJ tallied the 2020 revenue performance of these companies to see how REI compared. Of course, there’s not a true apples-to-apples comparison for REI. The only retailer in the mix is Dick’s Sporting Goods, which isn’t nearly as outdoor-focused (though that could change soon). Dick’s posted a 9.5 percent sales increase in 2020.

Also important to bear in mind is the fact that many of the OBJ Outdoor Index companies aren’t on a calendar reporting year. We tallied 2020 revenues to compare with REI’s performance—but some of those revenue tallies include quarterly figures from different fiscal years.

One more caveat: REI is a co-op, and the companies on the OBJ Outdoor Index are publicly traded corporations that focus primarily—though not exclusively—on the value returned to shareholders. REI doesn’t always measure success the same way.

For a look at how outdoor-focused companies performed last year, here is the OBJ Outdoor Index revenue chart:

OBJ Outdoor Index: 2020 Sales

* Calendar-year total includes a combination of different fiscal periods that most closely match Jan.-Dec. 2020

Not All Bad News for REI

Despite REI’s revenue and income dips, there were some green shoots in the co-op’s financials. It’s in a strong cash position—in part because REI was able to unload its headquarters last year—and it’s debt free.

The co-op continued to grow, adding one million members and opening eight stores in 2020 when many other retailers contracted. REI also continued to give back, investing $6.3 million in more than 400 nonprofit partners.

REI this week also unveiled its Cooperative Action Network, “a new initiative to harness the collective power of our 20-million-member, 15,000-employee community to combat the most pressing issues facing our industry and society—climate change and racial equity,” Artz said. The co-op, while continuing to leverage the ongoing outdoor boom to help revenue bounce back in 2021, is also using its size and scale to fight for social and environmental causes.

That’s one constant in a changing and challenging landscape.

“Our co-op was founded on the principle of individuals coming together for the greater good,” Artz said. “Now, the stakes have never been higher for our planet, ourselves, and future generations. As a community united by our shared love for life outdoors, together we can drive the progress we need to make towards a more sustainable and equitable future for our planet.”