Adidas posts first loss in 30 years but sticks to dividend
By Helen Reid
HERZOGENAURACH, Germany (Reuters) — German sportswear giant Adidas (OTC:ADDYY) posted its first loss in more than 30 years in 2023 on Wednesday as CEO Bjorn Gulden works to turn the brand around after a messy break-up with rapper Kanye West.
Adidas has been battling to right itself after it cut ties with West in October 2022, suspending sales of the highly profitable Yeezy sneaker line.
In Gulden's first year in the role, he resumed sales of Yeezy sneakers to clear remaining stock while seeking to boost popular products like Samba and Gazelle shoes, and improve relationships with retailers. Shares in Adidas have staged a recovery, outperforming Nike (NYSE:NKE) and Puma since he took over.
«Although by far not good enough, 2023 ended better than what I had expected at the beginning of the year,» Gulden said.
Adidas said it expects its underlying business — excluding Yeezy — to improve in 2024, with double-digit growth in the second half.
The company said its board would propose a dividend of 0.70 euros ($0.7650) per share on its 2023 performance, unchanged from a year earlier, despite posting a net loss of 58 million euros, its first since 1992. Shares in Adidas were expected to fall 2% at the open.
Adidas sees sales in North America declining this year, blaming a still-overstocked market there. Sales in all other markets are expected to grow «significantly», it said.
Adidas is gambling that it can claw back market share from Nike and others even as demand for sportswear declines overall. It has benefited from a trend for low-rise suede «terrace» sneakers such as the Samba and Gazelle, and last year ramped up production.
Footwear sales grew by 8% in the fourth quarter, while apparel sales fell 13%.
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