German sportswear giant Adidas reported a net loss for 2023 on Wednesday and noted that revenues for North America will most likely struggle into 2024.
Adidas’s total revenue declined 5% in 2023 to around 21.5 billion euros. According to the results, the company posted a 75 million euro loss attributable to shareholders for the year and a 379 million euro loss in the fourth quarter.
The poor earnings result is the company’s first loss in more than 30 years, according to Reuters. Lower demand for apparel and sportswear in the U.S. and overstocked stores are continuing to eat into sales.
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“Although by far not good enough, 2023 ended better than what I had expected at the beginning of the year,” Bjørn Gulden, CEO of Adidas, said in the fourth quarter press release. “Despite losing a lot of Yeezy revenue and a very conservative sell-in strategy, we managed to have flat revenues. We expected to have a substantial negative operating result but achieved an operating profit of €268 million. With a very disciplined go-to-market and buying process, we reduced our inventories by almost €1.5 billion. With the exception of the US, we now have healthy inventories everywhere.
Adidas’ North American sales in the year suffered heavily from the company’s dispute with rapper Kanye West after his shoe brand Yeezy was dropped by Adidas in October 2022 after a number of controversial comments, according to the release. The company lost around 500 million euros compared to the previous year due to discontinuation, with sales being resumed later in the year to reduce inventory.
According to the release, currency-neutral sales in North America dropped 16% in the year, while sales in Greater China rose 8%. Revenues in Asia-Pacific increased by 7%, and Latin American sales were up 22% in the year.
According to the release, Adidas expects revenues to grow significantly in every market except North America in 2024. The company continues to sell off excess inventory as consumers struggle for cash.
Adidas did not immediately respond to a request for comment from the Daily Caller News Foundation.
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