As a result of the costly termination of its agreement with Kanye West’s Yeezy brand in October, Adidas on Wednesday revealed a significant fourth-quarter loss and reduced its dividend.
The major German sportswear company reported an operating loss of 724 million euros ($763 million) for the fourth quarter and a net loss of 482 million euros from continuing operations. At its annual general meeting on May 11, the business will propose a dividend of 70 cents per share, down from 3.30 euros per share in 2021.
Shares of Adidas
Due to the business’s Yeezy agreement being terminated, currency-neutral revenues decreased by 1% in the fourth quarter and will continue to do so until 2023, according to the company.
Adidas anticipates posting its first annual deficit in 31 years in 2023, with a full-year operating loss of 700 million euros. The forecast takes a knock of 200 million euros in “one-off charges” and 500 million euros in probable Yeezy inventory write-offs.
- The German sportswear company reported an operating loss of 724 million euros.
- Adidas anticipates a full-year operating loss of 700 million euros.
- During morning trade in Europe, Adidas shares decreased by 1.7%.
Bjorn Gulden, the new Adidas CEO who replaced Kasper Rorsted at the beginning of the year, declared in a statement on Wednesday that 2023 will be a “transition year” as the business aims to cut back on stocks and discounts to achieve profitability again in 2024.
Except for greater China, all markets saw growth in 2022 in terms of currency-neutral revenues, with double-digit growth seen in North America and South America. Net income from ongoing activities was 254 million euros while operating profit totaled 669 million euros.
Also, due to the macroeconomic environment and rising supply chain costs during the epidemic, Adidas has had to offer steep discounts to draw in customers.
During morning trade in Europe, Adidas shares decreased 1.7%, but they are still up more than 11% for the year.
