Adidas will slash its 2022 dividend, it said on Wednesday, warning that a split with rapper and fashion designer Kanye West could push it this year to its first annual loss in three decades.
The company will recommend a dividend of €0.70 (about R13.73) per share at a May 11 AGM, it said. The 2021 dividend was €3.30 a share.
Adidas is dealing with the fallout from ending its partnership with West which yielded the lucrative Yeezy sneaker line.
CEO Bjorn Gulden, who took the reins on January 1, pledged to rebuild the bruised brand.
The company needed to refocus on its core business and faced a “transition” year before returning to profit in 2024, he said.
Shares in Adidas were down 3.1% in early trading.
Adidas said it is deciding what to do with its stock of unsold Yeezy footwear. The split cost it €600m (about R11.7bn) in sales in the fourth quarter of 2022, and Yeezy shoes would have brought in an estimated $1.2bn (about R22.3bn) this year.
Currency-neutral revenue declined by 1% in the fourth quarter, taking into account a €600m loss after it stopped selling Yeezy shoes.
For 2023, the company forecast underlying operating profit at roughly break-even level when taking into account the sales loss should it fail to sell existing Yeezy stock.
The end of Covid-19 lockdowns in China is expected to drive sales up across the major retail brands for whom China is a key market, but for Adidas that boost will likely be wiped out by the impact of the Yeezy split, making it hard for it to compete against rivals Nike and Puma.
Analysts at Wedbush who track new sneaker product launches said Nike is likely to take market share from Adidas in the absence of new Yeezy designs.
Adidas to slash dividend after Kanye West split
Image: Orrin Singh/TimesLIVE
Adidas will slash its 2022 dividend, it said on Wednesday, warning that a split with rapper and fashion designer Kanye West could push it this year to its first annual loss in three decades.
The company will recommend a dividend of €0.70 (about R13.73) per share at a May 11 AGM, it said. The 2021 dividend was €3.30 a share.
Adidas is dealing with the fallout from ending its partnership with West which yielded the lucrative Yeezy sneaker line.
CEO Bjorn Gulden, who took the reins on January 1, pledged to rebuild the bruised brand.
The company needed to refocus on its core business and faced a “transition” year before returning to profit in 2024, he said.
Shares in Adidas were down 3.1% in early trading.
Adidas said it is deciding what to do with its stock of unsold Yeezy footwear. The split cost it €600m (about R11.7bn) in sales in the fourth quarter of 2022, and Yeezy shoes would have brought in an estimated $1.2bn (about R22.3bn) this year.
Currency-neutral revenue declined by 1% in the fourth quarter, taking into account a €600m loss after it stopped selling Yeezy shoes.
For 2023, the company forecast underlying operating profit at roughly break-even level when taking into account the sales loss should it fail to sell existing Yeezy stock.
The end of Covid-19 lockdowns in China is expected to drive sales up across the major retail brands for whom China is a key market, but for Adidas that boost will likely be wiped out by the impact of the Yeezy split, making it hard for it to compete against rivals Nike and Puma.
Analysts at Wedbush who track new sneaker product launches said Nike is likely to take market share from Adidas in the absence of new Yeezy designs.
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