Adidas Slashes Dividend as Problems Mount
HERZOGENAURACH, Germany—A slump in China and a $6 billion mountain of unsold products are among the challenges facing
Adidas AG
ADDYY -2.80%
after a bruising 2022 in which it dumped its chief executive and ended a partnership with rapper Kanye West.
The German sportswear giant’s revenues increased 6% last year to 22.5 billion euros, equivalent to $23.7 billion, while its net profit fell 83% to €254 million. For the fourth quarter, Adidas slumped to a €482 million loss and the company slashed its dividend. The results out Wednesday largely confirmed preliminary figures from the company’s profits warning in February.
Adidas said that revenues would decline by a single-digit percentage amount in 2023 as it aims for a reset under Chief Executive Bjørn Gulden, who took charge at the start of this year.
The company hasn’t decided what to do with its unsold Yeezy inventory.
Photo:
Seth Wenig/Associated Press
“2023 will be a transition year to build the base for 2024 and 2025,” said Mr. Gulden. Resolving the inventory overhang will be a priority for this year, he said, with inventory levels having increased by half last year to just under €6 billion.
Additionally, “we need to put our focus back on our core: product, consumers, retail partners, and athletes,” Mr. Gulden said.
SHARE YOUR THOUGHTS
What is your outlook on Adidas? Join the conversation below.
Revenues grew in all regions last year except China, where sales were down 36% on the year. Addressing the company’s decline in a country that was once a key source of growth is a key challenge for Mr. Gulden, according to analysts.
Adidas announced further changes to its senior leadership team Wednesday, including the departure of two members of its executive board, as it seeks to reignite consumer engagement and kick-start sales.
Long-serving head of sales
Roland Auschel
is to leave; he will be succeeded by Arthur Hoeld, previously the European managing director. Brian Grevy, the head of global brands, is also stepping down, with Mr. Gulden assuming responsibility for branding, as well as product and marketing activities.
The moves are the latest in a series of high-profile changes at the company. Adidas terminated its lucrative Yeezy partnership with Mr. West, who now goes by Ye, last year in response to the star’s antisemitic remarks.
The company has yet to decide what to do with its unsold Yeezy inventory, but has already factored in a €700 million write-off of its Yeezy sneakers into its results.
Former Chief Executive
Kasper Rorsted
left Adidas last year having failed to reverse a steep decline in the share price, resulting in Mr. Gulden’s hiring from crosstown rival
Puma SE.
Write to Trefor Moss at [email protected]
Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8
HERZOGENAURACH, Germany—A slump in China and a $6 billion mountain of unsold products are among the challenges facing
Adidas AG
ADDYY -2.80%
after a bruising 2022 in which it dumped its chief executive and ended a partnership with rapper Kanye West.
The German sportswear giant’s revenues increased 6% last year to 22.5 billion euros, equivalent to $23.7 billion, while its net profit fell 83% to €254 million. For the fourth quarter, Adidas slumped to a €482 million loss and the company slashed its dividend. The results out Wednesday largely confirmed preliminary figures from the company’s profits warning in February.
Adidas said that revenues would decline by a single-digit percentage amount in 2023 as it aims for a reset under Chief Executive Bjørn Gulden, who took charge at the start of this year.
The company hasn’t decided what to do with its unsold Yeezy inventory.
Photo:
Seth Wenig/Associated Press
“2023 will be a transition year to build the base for 2024 and 2025,” said Mr. Gulden. Resolving the inventory overhang will be a priority for this year, he said, with inventory levels having increased by half last year to just under €6 billion.
Additionally, “we need to put our focus back on our core: product, consumers, retail partners, and athletes,” Mr. Gulden said.
SHARE YOUR THOUGHTS
What is your outlook on Adidas? Join the conversation below.
Revenues grew in all regions last year except China, where sales were down 36% on the year. Addressing the company’s decline in a country that was once a key source of growth is a key challenge for Mr. Gulden, according to analysts.
Adidas announced further changes to its senior leadership team Wednesday, including the departure of two members of its executive board, as it seeks to reignite consumer engagement and kick-start sales.
Long-serving head of sales
Roland Auschel
is to leave; he will be succeeded by Arthur Hoeld, previously the European managing director. Brian Grevy, the head of global brands, is also stepping down, with Mr. Gulden assuming responsibility for branding, as well as product and marketing activities.
The moves are the latest in a series of high-profile changes at the company. Adidas terminated its lucrative Yeezy partnership with Mr. West, who now goes by Ye, last year in response to the star’s antisemitic remarks.
The company has yet to decide what to do with its unsold Yeezy inventory, but has already factored in a €700 million write-off of its Yeezy sneakers into its results.
Former Chief Executive
Kasper Rorsted
left Adidas last year having failed to reverse a steep decline in the share price, resulting in Mr. Gulden’s hiring from crosstown rival
Puma SE.
Write to Trefor Moss at [email protected]
Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8
Denial of responsibility! Techno Blender is an automatic aggregator of the all world’s media. In each content, the hyperlink to the primary source is specified. All trademarks belong to their rightful owners, all materials to their authors. If you are the owner of the content and do not want us to publish your materials, please contact us by email – [email protected]. The content will be deleted within 24 hours.