Adidas cuts dividend after loss as Yeezy sneakers remain unsold

Adidas has cut its dividend after suffering a quarterly operating loss as sales from China halved and unsold Yeezy training shoes piled up after the brand decided to sever ties with rapper Kanye West.

The German sportswear group cut its dividend for the full year by 79 percent to 70 cents from 3.30 euros in the previous year. Operating loss in the fourth quarter was €724 million, although that was better than analysts’ expectations of a loss of €782 million.

Adidas on Wednesday reiterated last month’s warning that it could suffer an annual loss of up to €700m in 2023, which would be the first in 31 years.

The Yeezy debacle, following the brand’s decision to sever ties with the US rapper in October, will take annual sales to $1.2 billion.

Overall sales are expected to fall “at a high single-digit rate” this year after rising 1 percent last year.

Adidas CEO Björn Gulden, who joined from competitor Puma earlier this year, vowed on Wednesday to “make the company the best sports brand in the world again”. He warned that this would take time, as inventories and discounts would have to be cleared first. “2023 will be a transition year to lay the groundwork for 2024 and 2025.”