Adidas’ sales in the UK fell 9.0 percent to £1.125 billion in 2023, according to its UK-specific accounts filed at Companies House. Net profits in the country were down 29.0 percent to £22 million.
By channel, Adidas’ wholesale revenues fell 11.5 percent to £753 million last year, while online sales declined 12.9 percent to £255.8 million. Retail sales grew 16.4 percent to £106.4 million.
Gross margins eroded to 19 percent, down from 24 percent a year ago. Profit before tax fell 18 percent to £30.9 million. Operating profits slid 11.5 percent to £36.3 million from £41.0 million.
In a Board statement signed by Michael Creighton, Adidas Brand Director for the UK region, Adidas said, “2023 was a transition year for Adidas. The appointment of Bjorn Gulden as new CEO in January paved the way for a successful start. The company significantly reduced its inventories and created a lot of brand heat by offering some of the most sought-after product in the market. The rapid scaling of the Terrace range is a standout example that has driven customer demand in 2024.”
Addressing “global challenges” facing the brand, Adidas said, “2024 has started with high inflation, interest rate rises and geopolitical tensions. Despite the above challenges, the 2024 outlook is positive with consumer demand still high for Adidas products mainly driven by the terrace trend in lifestyle and the industry is set to benefit from Euro 2024 and Olympic Games Paris 2024.”
Companywide, Adidas’ sales in 2023 declined 5 percent to €21.4 billion in Euro terms with flat currency-neutral revenues. The discontinuation of the Yeezy business represented a drag of around €500 million on the year-over-year comparison during 2023.
Adidas’ operating profit reached €268 million in 2023, down from €669 million a year ago. The latest year includes one-off costs of around €200 million related to a strategic review the company conducted in 2023 and Yeezy donations and accruals for further contributions of more than €140 million.
In July 2024, Adidas raised its guidance for the second time in the year after seeing healthy double-digit growth in the second quarter.
The company is now projecting currency-neutral revenues to increase at a high-single-digit rate in 2024, up from the previous April 2024 guidance for mid- to high-single-digit growth. The company also projected that operating profit would reach around €1.0 billion, up from prior expectations of around €700 million.
Image courtesy Adidas
