Adidas posts first loss in 30 years

HERZOGENAURACH, Germany — German sportswear giant Adidas posted its first annual loss in more than 30 years on Wednesday and warned sales in North America would fall again as sportswear retailers in the U.S. struggle with high inventories.

Adidas has been battling to right itself after it cut ties with Kanye West in October 2022, suspending sales of the highly profitable Yeezy sneaker line.

In CEO Bjorn Gulden’s first year in the role, he resumed sales of Yeezy sneakers to clear remaining stock while seeking to boost popular products like Samba and Gazelle shoes, and improve relationships with retailers. Shares in Adidas have staged a recovery, outperforming Nike and Puma since he took over.

“Although by far not good enough, 2023 ended better than what I had expected at the beginning of the year,” Gulden said.

Adidas shares were trading flat as of early Wednesday morning.

This year North America will continue to be weak with Adidas expecting sales to fall by around 5 per cent this year.

Lower demand and overstocked stores in the U.S. have weighed on sportswear and apparel companies, and Adidas said sales in North America fell by 21 per cent in the fourth quarter and by 16 per cent over the year.

Overall, Gulden said clearing stock through its outlet stores helped Adidas bring inventories down by 1.5 billion euros in 2023, a 24 per cent decline.

Adidas has flagged shipment delays of two to three weeks due to the Red Sea crisis, and Chief Financial Officer Harm Ohlmeyer said on Wednesday that there could be an impact on working capital if the disruptions continue.