Adidas confirms preliminary budget figures released in February. In 2022, profit from continuing operations plummeted to €254 million: -83% from a year earlier. The negative performance was impacted by the €482 million loss in the fourth quarter, reflecting -50% of revenues in China and the impact of the €600 million related to the decision in October to sever relations with Kanye West, partner for the Yeezy sneaker line, due to some of the rapper's anti-Semitic statements.
Annual revenues grew 6% to €22.5 billion (up 1% at constant exchange rates), but the performance was weighed down by -36% in Greater China, the only geographic area in decline.
The sportswear giant reiterated that it expects an operating loss of €700 million for 2023, €500 million of which is related to the possible cancellation of Yeezy model inventories, while another €200 million relates to the group and its strategic vision to return to profitability in 2024.
Sales in the new fiscal year could show a decline within 9%, assuming ongoing macroeconomic challenges and geopolitical tensions persist. Management speaks of high recession risk in Europe and North America and lingering uncertainties about recovery in China.
Then there is the Yeezy issue: various options regarding inventory are being evaluated, and the outlook already reflects the possibility of losing €1.2 billion in sales from the failure to sell existing stock.
"2023 will be a transition year to build the base for 2024 and 2025," said ceo Bjørn Gulden. "We need to reduce inventory and lower discounts. Then we can again start building a profitable business in 2024. Adidas has all the ingredients to succeed,” he added.
The supervisory board also announced that it will extend the term of CFO Harm Ohlmeyer until the beginning of 2028. Ohlmeyer serves on the executive board and has been the CFO of the Clover Group since 2017.
In addition, Arthur Hoeld has joined the executive board, with responsibility for global sales as of next April. Hoeld, who has been with the company for 25 years, has held the role of managing director of the Emea region since 2018 and takes over from Roland Auschel, who is stepping down after 33 years, including 10 on the board.
Brian Grevy, who has responsibility for global brands on the executive board, also announced that he plans to leave Adidas at the end of the month. His position will pass to ceo Bjørn Gulden, who will then take direct responsibility for product and marketing.
From April, the new executive board will consist of five members: Bjørn Gulden (chief executive officer and Global brands), Arthur Hoeld (Global sales), Harm Ohlmeyer (chief financial officer), Amanda Rajkumar (Global human resources, people and culture) and Martin Shankland (Global operations).
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