Adidas has slashed its dividend after swinging to a quarterly operating loss, as sales from China halved and unsold Yeezy training shoes piled up following the brand’s decision to sever ties to rapper Kanye West.
The German sportswear group cut its full-year dividend 79 per cent to 70 cents from €3.30 last year. Its fourth-quarter operating loss came to €724mn, although that was better than analyst expectations of a loss of €782mn.
Adidas on Wednesday reiterated last month’s warning that it might suffer an annual loss of up to €700mn in 2023, which would be the first in 31 years.
The Yeezy debacle, following the brand’s decision to cut its links with the US rapper in October, will wipe out €1.2bn in annual revenue and may lead to €500mn in losses should the brand be unable to sell its remaining stock of trainers.
Overall sales this year are set to fall “at a high single-digit rate” after rising 1 per cent last year.
Adidas chief executive Björn Gulden, who joined from rival Puma earlier this year, on Wednesday promised to bring the company “back to be the best sports brand in the world once again”. He warned that it would take time as it first needed to cut inventories and discounts. “2023 will be a transition year to build the base for 2024 and 2025.”