(Frankfurt) German sports equipment manufacturer Adidas reported on Wednesday an annual loss in 2023, weighed down by significant losses in sales of Yeezy shoes and a high inventory problem in the United States, likely to continue into 2024.
The group’s net loss of 75 million euros (110.6 million CAD) follows a positive balance of 612 million (920.7 million CAD) posted a year earlier.
Overall sales, down 5% to 21.4 billion euros (31.6 billion CAD), suffered mainly in the United States following the cessation of sales of the Yeezy model, according to a press release.
In the fourth quarter of 2023, overall sales fell 2%, excluding currency effects, with a sharp decline of 21% in North America, the result of an organized decline in sales to wholesalers and the company’s desire to reduce excess inventory.
For this reason, Adidas warns that it expects a further decline in its sales on this continent this year, of around 5%, according to the press release.
Adidas is targeting overall growth of around 5% in sales at constant exchange rates in 2024, which will include 250 million in revenue linked to the end of clearance of Yeezy sneakers, as indicated at the beginning of February.
Operating profit should reach 500 million euros, as communicated at the beginning of February.
Adidas broke off its collaboration with controversial rapper Kanye West in October 2022, notably criticized for anti-Semitic comments, and has since sought a solution for the thousands of shoes that made their collaboration successful for years.
Two partial sales of shoe stock in 2023 made it possible to collect nearly 750 million euros in revenue, with the profits donated to NGOs.
In comparison, Yeezy sales in 2022 represented 1.2 billion euros.
In Europe, sales fell by 7% in the last quarter, compared to 2022, stimulated by the Football World Cup in Qatar.
In 2024, Adidas expects China and Latin America to see sales grow at a “double-digit” percentage, and nearly 10% in Europe and emerging markets, again excluding currency effects.