Connect with us
Finance Digest is a leading online platform for finance and business news, providing insights on banking, finance, technology, investing,trading, insurance, fintech, and more. The platform covers a diverse range of topics, including banking, insurance, investment, wealth management, fintech, and regulatory issues. The website publishes news, press releases, opinion and advertorials on various financial organizations, products and services which are commissioned from various Companies, Organizations, PR agencies, Bloggers etc. These commissioned articles are commercial in nature. This is not to be considered as financial advice and should be considered only for information purposes. It does not reflect the views or opinion of our website and is not to be considered an endorsement or a recommendation. We cannot guarantee the accuracy or applicability of any information provided with respect to your individual or personal circumstances. Please seek Professional advice from a qualified professional before making any financial decisions. We link to various third-party websites, affiliate sales networks, and to our advertising partners websites. When you view or click on certain links available on our articles, our partners may compensate us for displaying the content to you or make a purchase or fill a form. This will not incur any additional charges to you. To make things simpler for you to identity or distinguish advertised or sponsored articles or links, you may consider all articles or links hosted on our site as a commercial article placement. We will not be responsible for any loss you may suffer as a result of any omission or inaccuracy on the website.

NEWS

Adidas posts first loss in 30 years but sticks to dividend

By Helen Reid

HERZOGENAURACH, Germany (Reuters) – German sportswear giant Adidas posted its first loss in more than 30 years in 2023 on Wednesday as CEO Bjorn Gulden works to turn the brand around after a messy break-up with rapper Kanye West.

Adidas has been battling to right itself after it cut ties with West in October 2022, suspending sales of the highly profitable Yeezy sneaker line.

In Gulden’s first year in the role, he resumed sales of Yeezy sneakers to clear remaining stock while seeking to boost popular products like Samba and Gazelle shoes, and improve relationships with retailers. Shares in Adidas have staged a recovery, outperforming Nike and Puma since he took over.

“Although by far not good enough, 2023 ended better than what I had expected at the beginning of the year,” Gulden said.

Adidas said it expects its underlying business – excluding Yeezy – to improve in 2024, with double-digit growth in the second half. Shares in Adidas were flat at the open.

It said its board would propose an unchanged dividend of 0.70 euros ($0.7650) per share on its 2023 performance despite posting a net loss of 58 million euros, its first since 1992.

Adidas is gambling that it can claw back market share from rivals even as consumers’ overall appetite for sportswear declines. Nike last month said it would cut 2% of its total workforce, or more than 1,600 jobs, to reduce costs as demand weakens.

Adidas has benefited from a trend for low-rise suede “terrace” sneakers like the Samba and Gazelle, and last year ramped up production. That trend helped footwear sales grow by 8% in the fourth quarter, while apparel sales fell 13%.

“Things have clearly been going in the right direction at Adidas since Bjorn Gulden took over,” said Thomas Joekel, portfolio manager at Union Investment. “Brand heat is increasing, which can also be seen from the fact that fewer products now have to be sold at a discount.”

Adidas sees sales this year falling in North America, its second-biggest market, saying overstocks remain high. In China it expects a stronger recovery, with sales growing at a double-digit rate after an 8% increase in 2023.

Adidas last month set expectations low for its remaining Yeezy products, saying it would sell the sneakers “at least at cost”. It launched its latest drop on Feb. 26, but demand for the shoes is difficult to predict.

The Yeezy sales are “still a little bit of a wild card,” said Cristina Fernandez, analyst at Telsey Advisory Group, despite the company managing the sales successfully so far.

Adidas made 750 million euros in revenue from Yeezy sales last year, resulting in a 300 million euro profit. The company set aside 140 million euros for donations to charities fighting antisemitism and racism.

($1 = 0.9151 euros)

 

(Reporting by Helen Reid; additional reporting by Linda Pasquini; writing by Rachel More; editing by Gerry Doyle and Jason Neely)

 

Continue Reading

Why pay for news and opinions when you can get them for free?

       Subscribe for free now!


By submitting this form, you are consenting to receive marketing emails from: . You can revoke your consent to receive emails at any time by using the SafeUnsubscribe® link, found at the bottom of every email. Emails are serviced by Constant Contact

Recent Posts