First loss for Adidas since 1992 Adidas wants to get going again after a year of losses

Germany’s largest sporting goods manufacturer, Adidas, suffered a net loss last year for the first time in more than thirty years. The result from continuing activities after taxes amounted to minus 58 million euros, after a profit of 254 million was achieved in 2022, Adidas announced on Wednesday in Herzogenaurach.

In the year of the 75th anniversary in 2024, the Swiss want to be back in the black and generate an operating profit of 500 million euros: (2023: 268 million). Sales of traditional shoe models such as “Samba” or “Campus”, which are currently in high demand, should help.

Expensive breakup with Kanye West

“In terms of external factors, one disaster after another has occurred,” CEO Bjørn Gulden said on Wednesday. He mentioned the corona pandemic, the problems with rapper Kanye West’s Yeezy products and the currency crisis in Argentina as examples.

The divorce of the scandalous musician Kanye West and his product line alone cost Adidas about 500 million euros in sales last year compared to 2022. Despite the net loss, Adidas wants to pay its shareholders a dividend of 0.70 euros per share, just like last year .

Sales of Yeezy products are expected to end this year – finally, as the CEO assured. 140 million euros in sales surpluses have already been made available in donations; these go, for example, to organizations that are committed to combating racism.

Gulden currently does not expect any more to be added. The remaining sales with a volume of 250 million euros are only intended to cover costs.

Back to growth

The ex-football professional from Norway, who came to Adidas a year ago after very successful years as a savior from rival Puma, now wants to put the company back on a healthy growth path by 2026.

In 2024, currency-adjusted sales of 21.4 billion euros, which stagnated last year, are expected to grow by a single-digit percentage. Adidas would like to achieve double-digit growth again in 2026. The company currently employs approximately 60,000 people worldwide.

Higher prices should contribute to this. The large inventories, which had recently caused discount battles in the retail sector, were reduced by 1.5 billion euros in 2023 and had reached a healthy level of 4.5 billion euros at the beginning of this year, according to CFO Harm Ohlmeyer.

Turnaround in China

After several years of major problems, a turning point has been reached in the important Chinese market. In 2023, turnover growth of eight percent was again achieved. The US market continues to suffer from high inventories that have to be sold at lower prices.

In addition to using the Adidas archives to sell popular traditional models, Adidas also wants to score more and more points with current shoes. “The pipeline is full of innovations,” says Gulden, citing high-quality running shoes as an example.

So-called ‘lo profile’ shoes such as boxer boots with thin soles are currently a fashion trend. Overall, Gulden wants to bring its own products back to the local markets more than before. “Gone are the days when everyone wanted the same thing,” he said. (sda/awp/dpa)