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- Adidas AG ADDYY reported a 1% decline in currency-neutral revenues for fourth-quarter FY22. The decrease in revenue was due to impact of about €600 million caused by the termination of Yeezy partnership at the end of October.
- Also, a 50% revenue decline in Greater China due to the challenging market environment, company-specific challenges, and inventory takebacks weighed on revenue.
- However, revenues in Latin America, Asia-Pacific, and EMEA grew at double-digit rates.
- Gross margin declined by 990 basis points to 39.1% versus 49% last year. The fall was driven by higher supply chain costs and increased promotional activities.
- Adidas recorded an operating loss of €(724) million compared to a profit of €66 million last year.
- Dividend: Adidas' executive and supervisory board will recommend slashing the dividend to €0.70 from €3.30 in the annual general meeting on May 11.
- The supervisory board has extended the appointment of Harm Ohlmeyer as Chief Financial Officer of the company by another three years until the beginning of 2028.
- Outlook: For FY23, Adidas expects currency-neutral revenues to decline at a high-single-digit rate as macroeconomic challenges, and geopolitical tensions persist.
- While the company continues to review future options for utilizing its Yeezy inventory, the guidance reflects the revenue loss of around €1.2 billion from potentially not selling the existing stock.
- Adidas expects to report an operating loss of € (700) million in 2023.
- Price Action: ADDYY shares closed at $76.03 on Tuesday.
- Photo Via Company
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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