Adidas reported a big fourth-quarter loss in the last three decades and slashed its dividend.
The German sportswear giant posted a fourth-quarter operating loss of 724 million euros ($763 million) and a net loss from continuing operations of 482 million euros.
Moreover, the company will recommend a dividend of 70 euro cents per share at its May 11 annual general meeting, down from 3.30 euros per share in 2021.
Recently, the company terminated its costly and lucrative partnership with Kanye West’s Yeezy brand in October.
Currency-neutral revenues declined by 1% in the fourth quarter as a result of the termination of the company’s Yeezy partnership and will decline at a high-single-digit rate across 2023, the company said.
Adidas is projecting a full-year operating loss of 700 million euros in 2023, marking its first annual loss in 31 years.
The estimate includes a hit of 500 million euros in potential Yeezy inventory write-off and 200 million euros in “one-off costs.”
Earlier, Adidas scrapped its highly lucrative partnership with rapper and fashion designer Ye — formerly known as Kanye West, the face of Yeezy — in October, after he made a series of antisemitic comments.
The company had previously flagged a severe hit to revenues if it were unable to shift its huge remaining stock of unsold Yeezy footwear.
The company said underlying operating profit will be “around break-even level,” reflecting the loss of 1.2 billion euros in potential sales from unsold Yeezy stock.
Recently, speaking to the media, Adidas CEO Bjørn Gulden said in a statement that 2023 will be a “transition year,” as the company looks to reduce inventories and lower discounts in order to return to profitability in 2024.