Adidas FY sales fall short of estimates

13th Mar 2024 08:04

(Sharecast News) - German sportswear giant Adidas reported full-year results that fell short of estimates on Wednesday as a result of the loss of its very profitable Yeezy line following the cessation of its long-running collaboration with Kanye West.

Adidas said Q4 sales fell 7.6% to €4.81bn euros, while full-year revenues dropped 4.8% to €21.43bn. If it were not for the Yeezy business, Adidas would have reported currency-neutral revenue growth of 2% in 2023.

Chief executive Bjorn Gulden noted the company was still working to recover from the loss of Yeezy line.

"Despite losing a lot of Yeezy revenue and a very conservative sell-in strategy, we managed to have flat revenues," Gulden said. "We still have a lot of work to do, but I feel very confident we are on the right track. We will bring Adidas back again."

North American sales fell 16.1% in currency-neutral terms to €5.22bn, while Latin America saw sales growth of 21.6%to €2.29bn. In Europe, the Middle East and Africa, sales dipped 0.4% to €8.23bn, while sales in Greater China grew 36.8% to €3.19bn,

Adidas also said operating profits decreased significantly, falling 59.9% from €669.0m in 2022 to €268.0m in 2023.

Looking forward, Adidas sounded a positive note for the year ahead, predicting currency-neutral revenues to increase at a mid-single-digit rate during 2024. Gulden added that modest growth was expected to take place in the first half but said the second half of 2024 should be better.

As of 1230 GMT, Adidas shares were up 0.11% at €192.96 each.

Reporting by Iain Gilbert at Sharecast.com