On Wednesday, German sportswear giant Adidas disclosed a net loss for the fiscal year 2023 and anticipated ongoing challenges in North America’s revenues well into 2024.
According to the company’s financial results, Adidas experienced a 5% decline in total revenue for 2023, amounting to approximately 21.5 billion euros. The company posted a 75 million euro loss attributable to shareholders for the year, alongside a 379 million euro loss in the fourth quarter.
This marked the first annual loss for Adidas in over three decades, with factors such as diminished demand for apparel and sportswear in the U.S. and lingering inventory issues contributing to the decline in sales, as reported by Reuters.
Bjørn Gulden, CEO of Adidas, acknowledged the challenging landscape in the fourth quarter press release, noting that 2023 concluded better than initially expected. Despite setbacks such as the loss of revenue from the Yeezy brand and conservative sales strategies, Adidas managed to maintain flat revenues and even achieved an operating profit of €268 million through disciplined marketing and inventory management practices.
Adidas’ North American sales notably suffered due to the termination of its partnership with rapper Kanye West’s Yeezy brand in October 2022, following controversial remarks made by West. The discontinuation resulted in a loss of approximately 500 million euros compared to the previous year. While sales eventually resumed later in the year to reduce excess inventory, currency-neutral sales in North America plummeted by 16% for the fiscal year. In contrast, sales in Greater China increased by 8%, while revenues in Asia-Pacific and Latin America surged by 7% and 22%, respectively.
Looking ahead to 2024, Adidas anticipates significant revenue growth in all markets except North America, where the company continues to grapple with excess inventory issues amidst consumer financial constraints.
Adidas did not provide immediate comment in response to inquiries from the Daily Caller News Foundation.
