Adidas Posts First Annual Loss in Decades, Aims for Comeback in 2024

German sportswear giant Adidas endured its first annual loss in over three decades, grappling with slumping North American sales and the fallout from severing ties with celebrity designer Kanye West. The Yeezy collaboration, once a major revenue driver, was suspended in 2022 following controversial remarks by West. Yeezy sales in 2023 were estimated to be around €750 million, generating a €300 million profit for the corporation

The road to recovery won't be smooth sailing. North American sales plummeted in 2023, leading to a significant 21% decline in the fourth quarter and a hefty 16% drop for the entire year. Additionally, recent shipment delays caused by the Red Sea crisis could further impact the company's working capital.

However, Adidas remains optimistic. The company forecasts at least a 10% growth in the second half of 2024, excluding Yeezy sales. This optimism stems partly from the popularity of low-rise suede sneakers and a projected strong rebound in the Chinese market, where double-digit sales growth is anticipated. The fate of remaining Yeezy stock, valued at roughly €1.2 billion, remains uncertain, with Adidas planning to sell it "at least at cost."

The company will also maintain its dividend payout, proposing an unchanged dividend of 0.70 euros per share for its 2023 performance.