The problems with inflation caused by President Biden have gotten so bad that the legendary European company Adidas has now posted its first loss in 30 years. With a total loss of 5% in sales, it totaled 21.5 billion euros, with a 75-million-euro total loss and a 379-million-euro loss in the fourth quarter. Making the first loss in 30 years, they saw the sharpest decline in US sales as people have been purchasing less sports equipment.
Bjørn Gulden, CEO of Adidas, said, “Although by far not good enough, 2023 ended better than what I had expected at the beginning of the year. 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. With a very disciplined go-to-market and buying process, we reduced our inventories by almost €1.5 billion. With the exception of the US, we now have healthy inventories everywhere.”
After the company cut ties with Kanye West and his Yeezy line in October 2022, they got into a massive public dispute with the troubled artist. Forced to resume sales after a $500 million loss in product revenue, they had a firesale on his product line to clear out inventory and minimize losses.
Looking forward to 2024, the company is projecting continued growth in every market but North America. With consumers struggling to stay afloat during these uncertain times, the company is looking in various directions to get sales back on track. Slowly pivoting into combat sports, the company could potentially see a surge in sales if they embrace the culture and stop trying to focus on their soccer roots in North America.
