Adidas has reported delivery delays of two to three weeks due to the Red Sea crisis, which could affect the capital if disruptions continue.
German sportswear maker Adidas reported its first loss in 30 years and warned that sales in North America will fall again as US sportswear retailers have large inventories, Reuters wrote.
It was noted that Adidas is trying to correct the situation after the brand cut ties with Kanye West in October 2022 and suspended sales of the highly profitable Yeezy line of sneakers.
“During CEO Björn Gulden’s first year in office, the German brand relaunched sales of Yeezy sneakers to clear remaining inventory, while seeking to boost sales of other popular products such as Samba and Gazelle sneakers and improve relationships with retailers. Since this is the Gulden. position, Adidas shares began to recover, ahead of Nike and Puma,” the publication said.
At the same time, Gulden noted that 2023 ended better than he predicted at the beginning of the year.
Adidas expects North American sales to continue to be weak this year, down an estimated 5%. Overall, sales in North America were down 21% in the fourth quarter and 16% for the year.
Adidas also reported delivery delays of two to three weeks due to the Red Sea crisis, which could affect the capital if disruptions continue.
Adidas expects its core business – excluding Yeezy – to pick up in 2024, forecasting growth of at least 10% in the second half of the year.
Adidas expects greater change in China and expects sales there to grow at a double-digit rate following an 8% increase in 2023.
Excluding currency fluctuations, adidas’ revenue remained unchanged year-on-year, while the company itself predicted a decline of 1-3%.
Last year’s operating profit was 268 million euros. This is better than the expected operating loss of 100 million euros, but worse than last year’s profit of 669 million euros.
The net loss from continuing operations was €58 million, compared to a profit of €254 million in 2022. The company attributed this result to “very high” taxes.
In 2024, adidas forecasts an operating profit of around 500 million euros.
Revenue, according to company forecasts, will grow by 4-6% (mid-single-digit), excluding currency changes.
adidas’ board of directors will recommend a dividend of 70 euro cents per share, or a total of 125 million euros, the same as last year. In the future, the company plans to return to its dividend policy, which has provided annual dividends in the amount of 30-50% of net income from continuing operations.
Earlier it was reported that the American rapper Kanye West called on his fans to boycott the sports brand Adidas. The singer claims he’s making fake Yeezys and is after him for $250 million.
Source: korrespondent
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