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adidas weighed in by Kanye West! The German sports clothing giant suffered its first net loss in more than thirty years in 2023, weighed down by its dispute with the rapper and higher stocks, even as it expects a gradual recovery this year. The group reported on Wednesday Net loss, group share of 75 million euros, after a profit of 612 million a year earlier. Overall sales fell 5% to 21.4 billion euros. That’s about it “First net loss since 1992” for the three-striped brand, a spokesperson told AFP. Adidas was then owned by Bernard Tapie, who bought it in 1990 with the help of the French public authorities.
The German company said it was particularly hurt after it stopped selling Yeezy models in the United States, according to a press release. Adidas broke off its collaboration with controversial rapper Kanye West in October 2022 after being accused of making anti-Semitic comments, and has since sought a resolution to sell the thousands of shoes that have made their collaboration successful over the years. Two partial sales In 2023 it is certainly possible to collect about 750 million euros in revenue due to the stock of shoes. But in comparison, Yeezy’s sales in 2022 represent 1.2 billion euros.
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Nike, Adidas and Puma cut their sneaker prices to sell off stock
5% decline in sales
The group’s sales to wholesalers fell due to significant excess inventory, particularly in North America, where sales fell 21% in the fourth quarter. Adidas warns that it expects its sales on the continent to drop further this year for the same reason, according to a press release, by around 5%. “It will take time before things turn around”Group CEO Björn Gulden commented during a press conference on Wednesday.
Adidas is nevertheless targeting an overall growth of around 5% in 2024. 250 million euros in revenue from its sales at constant exchange rates, thanks to the expected end of approval of the remaining Yeezy sneakers. And after an expected sluggish start at the beginning of the year, growth will pick up in the second half of the year, reaching a percentage point “two digits”, depending on the group. China and especially Latin America will see a percentage increase in their sales “two digits” Throughout the year, and around 10% in Europe and emerging markets, again excluding currency effects.
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Big boost from adidas
To relaunch the Olympics brand?
The group also plans to surf Dynamics of major sporting events This summer, mainly the Olympic Games in Paris and the Euro football tournament in Germany, to boost its sales. “Because the Olympics are fun, people are in a good mood. And when they’re in a good mood, they buy more, so that’s positive.”, estimates Bjørn Gulden. Operating profit should reach 500 million euros, as communicated in early February.
In Europe, sales fell 7% in the last quarter of 2023, boosted by the football World Cup in Qatar in 2022. Despite a loss in 2023, shareholders are offered a steady dividend a year at 70 euro cents. In the stock market, Adidas shares ended the day up around 4.00% after falling 1.38% in the morning.
