©Reuters. FILE PHOTO: Adidas merchandise is seen at an Adidas store on the day the German company ended its partnership with American rapper and designer Kanye West, now known as Ye, in Garden City, New York, United States, on 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 sales in North America this year, blaming a market still saturated with inventory as the company continues to sell off the sneakers from his cut the Yeezy line.
Currency-neutral sales in North America are expected to decline at an average single-digit rate in 2024, with growth forecast in all other regions, Adidas said, announcing final full-year results.
Adidas reported preliminary results for the year in late January and gave forecasts for 2024 well below analysts’ expectations, as profits fall amid a sell-off of its discontinued sneaker line featuring Kanye West.
“While by far not good enough, 2023 ended better than I expected at the start of the year,” Chief Executive Bjorn Gulden said.
The German retailer said its board of directors will 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 bets it can recover market share Nike (NYSE:) and others even as demand for athletic apparel declines. It benefited from the trend of low-rise suede “terrace” sneakers like the Samba and Gazelle, and ramped up production last year.
Footwear sales grew 8% in the fourth quarter, while apparel sales fell 13%.
“Things are clearly going in the right direction at Adidas since Bjorn Gulden took over,” said Thomas Joekel, portfolio manager at Union Investment. “Brand heat is on the rise, as evidenced by the fact that fewer products now have to be sold at a discount.”
($1 = 0.9151 euros)