German sportswear giant Adidas reported on Wednesday a net loss for 2023 and noted that revenues for North America will most likely struggle into 2024.
Total revenue for Adidas declined 5% in 2023, totaling around 21.5 billion euros, with the company posting a 75 million euro loss attributable to shareholders for the year and a 379 million euro loss in the fourth quarter, according to the results. The poor earnings result is the first loss for the company in more than 30 years, with lower demand for apparel and sportswear in the U.S. as well as overstocked stores continuing to eat into sales, according to Reuters. (RELATED: Biden’s ‘Junk Fees’ Crackdown Is A Distraction From The Real Problems, Experts Say)
“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.
In 2022, the US led sneaker sales with $22B, selling 380M pairs. Nike topped global sales at $33B by May 31, 2023. Adidas earned $13B, highlighting Nike’s lead.
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Currency-neutral sales in North America dropped 16% in the year, while sales in Greater China rose 8%, according to the release. Revenues in Asia-Pacific increased 7%, and Latin American sales were up 22% in the year.
Looking to 2024, Adidas expects revenues to grow significantly in every market except North America, as the company continues to sell off excess inventory as consumers struggle for cash, according to the release.
Adidas did not immediately respond to a request to comment from the Daily Caller News Foundation.
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