Adidas reported an annual loss for the first time since 1992 – Kommersant
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Adidas ended 2023 with a net loss of €14 million and a loss from continuing operations of €58 million, follows from financial report companies. This is the first such case for the German manufacturer of sports shoes and clothing since 1992.
The main reason for the unprofitable year for Adidas was the American rapper Ye (formerly Kanye West) and his anti-Semitic statements. They led to rupture relationship between the company and the musician’s fashion brand Yeezy. Back in May last year reported, that Adidas warehouses have accumulated sneakers from the rapper worth $1.3 billion, which the company cannot sell due to the collapse of demand for them after the artist’s scandalous statements. As a result, as noted in the annual report, the termination of the partnership with Yeezy led to a loss of potential revenue of approximately €500 million.
Last spring, Adidas warned that 2023 could result in the company’s first annual operating loss in 30 years. According to the company’s forecasts, it could amount to €700 million by the end of the year. But in fact, Adidas managed to significantly improve its position by the end of the year. As a result, the company ended 2023 with an operating profit of €268 million, which is almost €1 billion better than initial forecasts.
Adidas expects to sell off its remaining Yeezy sneakers at cost this year and return to profitability. By the end of 2024, the manufacturer hopes to achieve an operating profit of €500 million.
The company’s shares decline by about 2% after the publication of financial statements.
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