The second largest sporting goods company in the world is in a deep crisis. Now the hopes rest on the new CEO Björn Gulden.
(Photo: imago images/Eibner)
Munich After a slump in profits last year, the Adidas 2023 crisis is getting worse. “We are currently not performing as well as we should be,” said the new CEO Björn Gulden on Thursday. Also because of the separation from the scandalous rapper Kanye West, there is a risk of a decline in sales and possibly an operating loss this year.
According to preliminary figures, last year sales increased by one percent to 22.5 billion euros, Adidas announced. The operating result collapsed from almost two billion euros to 669 million euros. Income from continuing operations fell from 1.5 billion euros to 254 million euros. This fell far short of the original expectations, which were lowered several times during the year.
This has further exacerbated Adidas’ crisis. The second largest sporting goods group in the world is suffering, among other things, from a slump in sales in China and the separation from West, whose Yeezy collection was sold by Adidas. After several profit warnings, CEO Kasper Rorsted had to step down last year. Hopes now rest on Gulden, who switched from smaller rivals Puma to Adidas.
An operating loss of 700 million euros is possible
Adidas still has a larger inventory of Yeezy products but no longer sells them. Although various options are being examined, the lack of a sale could reduce sales this year by around 1.2 billion euros and the operating result by 500 million euros. Against this background, a currency-adjusted decline in sales in the high single-digit percentage range is expected this year. The operating result could be “roughly at break-even level”.
However, if the inventory of Yeezy products is not used, this could reduce the operating result by a further 500 million euros. Since further one-off costs of 200 million euros are expected in the course of examining the strategic positioning, it is possible that an operating loss of 700 million euros will occur if all effects occur. “2023 will be a year of transition to create the basis for becoming a growing and profitable company again,” said Gulden.
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