© Reuters. FILE PHOTO: Adidas merchandise is seen in an Adidas store on the day the German company terminated its partnership with the American rapper and designer Kanye West, now known as Ye, in Garden City, New York, U.S., October 25, 2022. REUTERS/Shannon Staple
By Helen Reid
HERZOGENAURACH, GERMANY (Reuters) -German sportswear giant Adidas (OTC:) said on Wednesday it expects a decline in its sales in North America this year, blaming a still-overstocked market there, as the company continues to sell off the sneakers from its axed Yeezy line.
Currency-neutral sales in North America are expected to decline at a mid-single-digit rate in 2024, with growth forecast in all other regions, Adidas said, announcing its final full-year results.
Adidas reported preliminary results for the year in late January and delivered a 2024 forecast far below analysts’ expectations, as profits dwindle from a sell-off in its discontinued sneaker line with Kanye West.
“Although by far not good enough, 2023 ended better than what I had expected at the beginning of the year,” chief executive Bjorn Gulden said.
The German retailer said its board would propose a dividend of 0.70 euros ($0.7650) per share, unchanged from last year, despite a difficult 2023, during which the company posted a net loss from continuing operations of 58 million euros.
Adidas is gambling that it can claw back market share from Nike (NYSE:) and others even as demand for sportswear declines. It has benefited from a trend for low-rise suede “terrace” sneakers such as the Samba and Gazelle, and last year ramped up production.
Footwear sales grew by 8% over 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.”
($1 = 0.9151 euros)
This story originally appeared on Investing
