For the first time in three decades, Adidas had to admit to an annual loss. According to the troubled sports shoe manufacturer, however, things are “better than expected”.
America remains troublesome
Adidas did “not do well enough” last year, but CEO Bjorn Gulden still called the results “better than expected” when announcing the annual report. These are striking statements, as the net result plummeted from a 612 million euro profit in 2022 to a 75 million euro loss last year. It is the first loss in at least thirty years.
Sales also fell 5 % to 21.4 billion euros, mainly due to negative currency effects. In North America especially, sales were disappointing: shops in the United States struggled with lower demand and overstocks, causing sales there to fall 16 % last year. In the fourth quarter, sales were even down 21 %.
Delay due to Red Sea
Overall, apparel sales fell 13 % in the fourth quarter, while footwear sales grew 8 %. Adidas is betting more heavily on its vintage models, capitalising on the low trainer trend. Outlet retailing helped reduce inventories by almost a quarter.
Adidas is cautiously positive about 2024: results should improve, with at least 10 % growth in the second half. Although the brand fears losing some 5 % sales in North America this year. The Red Sea crisis is also causing a two- to three-week slowdown, which could eventually affect working capital.
