Adidas on Wednesday reported its first annual loss in more than 30 years, warning that U.S. sales will decline this year as the German sportswear giant continues to sell its remaining Yeezy inventory.
In 2023, Adidas posted a net loss of $63.4 million, the first time since 1992. MSN Previously reported.
Currency-neutral North American sales in 2024 will decline to about 5% in the mid-single digits due to “macroeconomic challenges and geopolitical tensions,” the company said. Earnings forecast.
This year, Adidas also said that “remaining Yeezy inventory is expected to be sold at cost.”
Adidas has already put its unsold Yeezy sneakers up for sale through digital platforms in three separate installments, following a failed collaboration with Kanye West, the rapper now known as “Ye.”
Adidas said inventory clearance helped reduce its 2023 inventory by $1.64 billion, or 24%.
The lucrative partnership, which generated an estimated $2 billion a year for Adidas, collapsed in October 2022 after nine years. Still, the end of the Yeezy product line left the company with only his $1 billion-plus worth of unsold shoes.
Adidas also sold shirts, jackets, track pants, socks, lingerie, and slippers in limited edition colors as part of its Yeezy line.
Also Wednesday, Adidas confirmed that its 2023 revenue will be flat. CEO Björn Gulden said the results were “quite unsatisfactory” but still “better than I expected.”
Adidas stock rose nearly 2% to $105.35 on news of the company’s better-than-expected results.
In the fourth quarter of 2023, Adidas posted an operating loss of approximately $412.25 million.
“Despite losing much of Yeezy’s revenue and having a very conservative sales strategy, we managed to achieve flat revenue. We expect operating results to be significantly negative. However, we achieved an operating profit of 268 million euros ($293 million),” Gulden added.
“We still have a lot of work to do, but we are very confident that we are on the right path. We will bring Adidas back again. Give us a little time and we will do it again. I say – I understand!”
Gulden confirmed preliminary results released in January, when Adidas first announced it would not write down much of its Yeezy inventory and would instead sell it.
The company will donate a portion of its profits from unsold lines to organizations such as the Anti-Defamation League and the Philonise and Keeta Floyd Institute for Social Change, run by Philonise Floyd, the brother of social justice advocate George Floyd. He announced that he would donate to the organization.
Adidas has announced that it will donate up to $150 million to these organizations.
Representatives for Adidas did not immediately respond to The Post’s request for comment.
