Adidas hit by 2023 loss amid Yeezy overstock and falling North America sales
Adidas has recorded a net loss of €75 million (US$82 million) for the year 2023, marking its first annual loss since 1992. The company's financial performance was impacted significantly by the termination of its partnership with Kanye West and the subsequent discontinuation of the Yeezy line. The decision to end the collaboration came after West made a series of anti-Semitic remarks. This resulted in a 5% decline in sales to €21.4 billion, with a particularly notable drop in North America.
Despite the challenges, Adidas confirmed an operating profit of €268 million ($292.9 million) for the year, which exceeded expectations. The company also plans to sell the remaining Yeezy inventory at cost, expecting to generate around €250 million in sales, and has committed to donating profits from these sales to charity. Looking ahead, Adidas has projected a decline in North American sales at a mid-single-digit rate for 2024, but anticipates a mid-teen-digit growth rate globally.
Adidas intends to maintain its dividend at €0.70 per share, despite the difficulties faced in the past year. CEO Bjørn Gulden expressed optimism about the company's potential for recovery and the goal to return Adidas to a position of prominence in the market. The company forecasts an operating profit of around €500 million for 2024, anticipating a significant improvement in business with expected double-digit growth by the second half of the year.
