“Despite falling short of desired targets, the conclusion of 2023 exceeded initial expectations,” summarized adidas CEO Bjørn Gulden. “Despite notable losses in Yeezy revenue and a cautious approach to sales, we maintained steady revenues, achieving an operating profit of €268 million. Our disciplined market approach and inventory management led to a reduction of nearly €1.5 billion in stock levels, with healthy inventory balances across regions except for the US.”
In terms of full-year results, adidas’ sales remained flat in currency-neutral terms, outperforming earlier projections of a high-single-digit decline. This performance was attributed to strengthened business fundamentals and the clearance of remaining Yeezy inventory. However, in euro terms, revenue decreased by 5% to €21.4 billion, impacted by reduced wholesale sales and the discontinuation of the Yeezy line, resulting in a negative impact of approximately €500 million.
Regionally, North America experienced a 16% currency-neutral revenue decline due to the Yeezy impact and conservative sales strategies, while EMEA saw flat revenue driven by direct-to-consumer growth offsetting wholesale declines. Greater China and Asia Pacific regions achieved 8% and 7% currency-neutral revenue growth, respectively, supported by own-channel expansion. Latin America reported a 22% sales increase despite currency devaluation.
Adidas’ gross margin improved slightly to 47.5% due to a favorable business mix and reduced freight costs, countered by negative currency effects and increased product costs. Despite an initial forecast of a €700 million operating loss, the company achieved an operating profit of €268 million, with a 1.3% margin. Net loss from continuing operations totaled €58 million, attributed to high tax rates, resulting in negative earnings per share of €0.67.
Looking ahead to fiscal 2024, adidas anticipates mid-single-digit currency-neutral sales growth, factoring in the sale of remaining Yeezy inventory. Sales are expected to accelerate throughout the year, with a full-year operating profit target of around €500 million.
