Adidas closed the 2022 financial year with an attributable net profit of 612 million euros, 71.1% below the result of 2,116 million recorded a year earlier by the multinational, which has cut the dividend by 78.8% and reiterated that it will assume operating losses of up to 700 million in 2023 if it canceled all the inventory of ‘Yeezy’, the brand developed in collaboration with Ye, a name adopted by Kanye West.

The net sales of the German manufacturer of sports clothing and footwear reached a sum of 22,511 million euros in 2022, 6% more than in 2021, after increasing its turnover in all its markets, except China.

Specifically, Adidas revenues in the year grew by 10.2% in Europe, the Middle East and Africa (EMEA), to 8,550 million, while in North America they increased by 25.3%, to 6,398 million, in Latin America they grew by 45.9%, up to 2,110 million, and in Asia Pacific 2.8%, up to 2,241 million.

However, Adidas sales in the Chinese market in 2022 registered an annual decrease of 30.9%, up to 3,179 million euros.

Between October and December, the German company recorded losses of 512 million euros in contrast to the attributable net profit of 202 million in the fourth quarter of 2021, while revenues totaled 5,205 million, 1.3% more.

Likewise, the executive and supervisory boards of Adidas will recommend at the general meeting on May 11 the distribution of a dividend of 0.70 euros per share, compared to the 3.30 euros distributed the previous year.

Looking ahead to the current financial year, Adidas expects revenue to decline by around 9%, without taking into account the exchange rate, as a result of macroeconomic challenges and geopolitical tensions, with elevated risks of recession in Europe and North America. , as well as the uncertainty surrounding the recovery of China.

Likewise, the multinational foresees that the evolution of its income will also be affected by initiatives to reduce high inventory levels, including future options for its Yeezy inventory.

“2023 will be a transition year to build the foundation for 2024 and 2025,” said Bjorn Gulden, Adidas CEO. “We need to reduce inventories and lower discounts. Then we can start building a profitable business again in 2024,” he said.

On the other hand, Adidas has confirmed that if it did not reuse any of the existing ‘Yeezy’ products, canceling existing inventory, it would have an adverse impact of 500 million in 2023 operating profit to which it would add extraordinary costs of up to 200 million in relation to with its strategic review, which would result in an operating loss of $700 million.