Adidas posted its first annual loss in more than three decades on Wednesday, and warned that US sales will drop this year as the German sportswear giant continues selling off its remaining Yeezy inventory.
For 2023, Adidas posted a $63.4 million net loss, its first since 1992, MSN earlier reported.
In 2024, currency-neutral sales in North America are expected to decline to a mid-single-digit rate, around 5%, over “macroeconomic challenges and geopolitical tensions,” the company said in its earnings outlook.
Also this year, Adidas also said its “remaining Yeezy inventory assumed to be sold at cost.”
Adidas has already been putting its unsold Yeezy sneakers up for sale through its digital platforms in three separate drops in the wake of its failed collaboration with Kanye West, the rapper now known as “Ye.”
Adidas said that clearing its stock helped Adidas bring inventories down by $1.64 billion in 2023, a 24% decline.
The lucrative partnership — which generated Adidas an estimated $2 billion per year — fell apart in October 2022 after nine years. Still, the end of the Yeezy product line left the company with more than $1 billion of unsold shoes alone.
Adidas had also sold shirts, jackets, track pants, socks, lingerie and slippers in limited edition colorways as part of its Yeezy merchandise.
Also on Wednesday, Adidas confirmed that its 2023 revenues remained flat — results that CEO Bjorn Gulden said were “by far not good enough” but still “better than what I had expected.”
Adidas shares were up nearly 2%, to $105.35, following news of the company’s better-than-expected performance.
For the fourth quarter of 2023, Adidas posted an operating loss of about $412.25 million.
“Despite losing a lot of Yeezy revenue and a very conservative sell-in strategy, we managed to have flat revenues. We expected to have a substantial negative operating result, but achieved an operating profit of €268 million ($293 million),” Gulden added.
“We still have a lot of work to do, but I feel very confident we are on the right track. We will bring Adidas back again. Give us some time and we will again say — we got this!”
Gulden confirmed preliminary results that had been released in January, when Adidas first announced that it would not write off the majority of its Yeezy inventory and would instead sell it off.
The company said that it would donate part of the profits from the unsold line to groups like the Anti-Defamation League and the Philonise & Keeta Floyd Institute for Social Change, run by social justice advocate Philonise Floyd, the brother of George Floyd.
Adidas has said that it plans to gift as much as $150 million to these groups.
Representatives for Adidas did not immediately respond to The Post’s request for comment.
This story originally appeared on NYPost
