Germany's largest sporting goods and sportswear manufacturer Adidas posted a net loss for the full year 2023 for the first time since 1992.
The result from continuing operations after taxes was a loss of €58 million ($63.4 million), after a profit of €254 million in 2022, Adidas announced from its headquarters in the town of Herzogenaurach in the southern state of Bavaria on Wednesday.
In 2024, the year of the company's 75th anniversary, Adidas plans to be back in the black and generate an operating profit of €500 million.
The sale of traditional footwear models such as Samba and Campus, which are currently in high demand, should contribute to this.
"In terms of external factors, there has been one disaster after another," chief executive Bjørn Gulden said on Wednesday. He cited the coronavirus pandemic, the problems with rapper Kanye West's Yeezy products and the currency crisis in Argentina as examples.
The separation from the scandal-ridden US musician and his product line alone cost Adidas around €500 million in sales last year compared to 2022.
Despite the net loss, Adidas intends to pay its shareholders a dividend of €0.70 per share, as in the previous year.
In the current year, sales of Yeezy products are to be ended - for good, as the chief executive assured. A total of €140 million in surpluses from the sales has already been made available in donations and will go to organizations that campaign against racism, for example. Gulden does not currently expect any more to be added.
The remaining sales totalling €250 million are only planned to cover costs.
The former professional footballer from Norway, who came to turn Adidas around from rival Puma just over a year ago after highly successful years, now wants to return the company to a healthy growth path by 2026.
In 2024, the company's sales of €21.4 billion, which stagnated last year in currency-adjusted terms, are set to grow by a mid-single-digit percentage. Adidas aims to return to double-digit growth in 2026. Around 60,000 people currently work for the company worldwide.
Higher prices should contribute to this. The large inventories, which had recently caused discount battles in retail, had been reduced by €1.5 billion in 2023 and had reached a healthy level of €4.5 billion at the beginning of the year, said chief financial officer Harm Ohlmeyer.
In the important Chinese market, the turning point had been reached after several years of major problems: In 2023, sales growth of 8% was achieved there again.
The US market continues to suffer from high inventory levels, which have to be sold at more favourable prices for consumers.
In addition to using the Adidas archives to sell popular traditional models, Adidas also plans to score highly with current shoes.
"The pipeline is full of innovations," said Gulden, citing high-quality running shoes as an example.
Overall, Gulden wants to try out local markets with their own products to a greater extent than before. "The days when everyone wanted the same thing are over," he said.
Looking at the quarterly figures, the net loss attributable to shareholders declined to €379 million in the fourth quarter from €512 million in the same period of the previous year, the company said on Wednesday.
Loss per share was €2.13 in the quarter, compared to a loss of €2.87 per share a year ago.
Net loss from continuing operations in the quarter amounted to €401 million or €2.36 per share, narrower than last year's loss of €482 million or €2.69 per share.
Adidas recorded an operating loss of €377 million in the quarter, down from the prior year's operating loss of €724 million. This resulted in a negative operating margin of 7.8%, compared to a negative operating margin of 13.9% a year earlier.
Revenue declined 8% in the quarter to €4.81 billion from last year's €5.21 billion.
Currency-neutral revenues in the fourth quarter declined 2%.
The company said it sees some growth already in the first quarter, but growth is expected to be stronger in the second half of the year.
