Adidas records first annual loss in 30 years

HERZOGENAURACH, Germany: This week, Adidas recorded its first annual loss in more than 30 years.

The German sportswear giant has been battling to right itself after it cut ties with Kanye West in October 2022, suspending sales of the Yeezy sneaker line. It also warned that as sportswear retailers in the U.S. struggle with high inventories, sales in North America will again decline.

"Although by far not good enough, 2023 ended better than what I had expected at the beginning of the year," CEO Bjorn Gulden said.

As of 11:15 GMT, Adidas shares were trading flat. In 2024, Adidas expects sales to fall by five percent in North America.

Sportswear and apparel companies have been hit by lower demand and overstocked stores in the U.S., and Adidas stated that sales in North America fell by 21 percent in the fourth quarter and by 16 percent over the year.

Gulden said that clearing stock through its outlet stores helped Adidas reduce inventories by 1.5 billion euros in 2023, a 24 percent decline.

On March 13, Chief Financial Officer Harm Ohlmeyer said that ongoing disruptions, such as shipment delays of two to three weeks due to the Red Sea crisis, could impact working capital.

Even as consumer demand for sportswear declines, Adidas aims to regain market share from rivals such as Nike, which recently cut jobs.

In China, Adidas expects a more robust recovery, with sales growing at a double-digit rate after an eight percent increase in 2023.

Despite a net loss of 58 million euro, its first since 1992, the company’s board will propose an unchanged dividend of 0.70 euro (US$0.7650) per share on its 2023 performance.