Adidas CEO assures 'we got this!' despite ‘by far not good enough’ results

Adidas performed better-than-expected during FY23, reporting flat revenues. Moving forward, CEO Bjørn Gulden is confident "we will bring Adidas back again".

Financial highlights for FY23:

• Currency-neutral sales remained flat versus the year prior - "above expectations".
• Adidas benefited from the sale of parts of the remaining Yeezy inventory. In euro terms, revenues declined 5% to £18.31 million (€21.427 million)
• Gross margin was up to 47.5%, due to a better business mix and lower freight costs.
• Operating profit stood at £229 million (€268 million).
• Net loss from continuing operations was £59.5 million (€58 million) in 2023, reflecting the extraordinarily high tax rate.
• Wholesale declined 4% and direct-to-consumer (DTC) revenues grew by 3%.
• Adidas' retail store sales were up 12%, however, its e-commerce business declined 5% due to the Yeezy impact.

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.

Looking ahead to FY24, the company expects currency-neutral revenues to increase at a mid-single-digit rate, with the remaining Yeezy inventory to be sold at cost. Operating profit is expected to reach £427 million (€500 million).

So far this year, Samba, Gazelle, Spezial and Campus styles are selling well and are also growing in all global web searches. Therefore, the company strives to "continue to keep the momentum on these models".

Gulden added: "We should see some growth already in Q1, but I expect growth to be stronger in the second half of the year. We still have a lot of work to do, but I feel very confident we are on the right track. We will bring Adidas back again. Give us some time and we will again say – we got this!"