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Adidas CEO Björn Gulden

Photo: Herbertz / Nico Herbertz / IMAGO

Contrary to expectations, Adidas was in the black last year. Last year's operating result was 268 million euros, as the company announced based on preliminary figures after the stock market closed in Herzogenaurach. This is a lower value than in 2022, where a profit of 669 million euros was made. But CEO Björn Gulden had recently expected a loss of around 100 million euros.

But the Christmas business went better than expected, he said, as did the sell-out of “Yeezy” shoes from the ended partnership with the US rapper “Ye” (Kanye West). Adidas is not writing off the rest of the sneakers, but wants to at least sell them to cover costs in 2024. However, the company is increasingly suffering from negative currency effects - such as the devaluation of the Argentine peso in the fourth quarter. This is likely to cause headwinds in 2024 and put a significant strain on profitability.

Sales fell by five percent to 21.4 billion euros in 2023. Due to the reduction in inventories, sales to wholesalers were significantly reduced, it said. In addition, the termination of the “Yeezy” business impacted sales development by around 500 million euros compared to the previous year. However, negative exchange rate effects are likely to have a significant impact on profitability in the current year. There are also the “challenges in North America,” says CEO Gulden. For 2024, Adidas expects an operating result of around 500 million euros.

Currency-adjusted sales are expected to increase in the mid-single-digit percentage range. According to the information, the sales forecast is based on the assumption that Adidas will sell the remaining Yeezy stocks to cover costs, which would lead to sales of around 250 million euros. CEO Gulden assumes “that sales at the beginning of the year will initially be at the same level as the previous year, but will then improve from quarter to quarter.”

Share price collapses

The outlook disappointed stock market traders: Adidas shares fell by more than nine percent in late trading. According to LSEG data, analysts had expected Nike's rival to make an operating profit of almost 1.3 billion euros this year. The smaller local rival Puma recently frightened the markets with weak figures and the share price collapsed. Adidas was initially able to reassure the analysts. Gulden now put investors off to 2025: "This year is the next building block to make Adidas a company with double-digit growth and an operating margin of ten percent."

A year ago, the Norwegian warned of a loss of up to 700 million euros in 2023. But then he brought himself to throw the "Yeezy" models designed by Ye, which had long since been produced, onto the market despite the scandal surrounding the rapper's anti-Semitic statements. Two online sales campaigns alone brought Adidas 700 million euros in sales and 300 million euros in operating profit.

mgo/dpa/Reuters