LONDON (Reuters) -Adidas shares fell on Thursday after the sportswear maker delivered a forecast for 2024 well below analyst expectations, based on limited profits from selling off its last stocks of Yeezy shoes after its break-up with Kanye West.
Adidas forecast an operating profit of around 500 million euros ($539.95 million) in 2024, against analysts’ estimate of 1.23 billion euros. The company said its forecast assumes Adidas will sell its remaining Yeezy shoe inventory at cost.
“Our consumer, retail and trade research has shown that we can sell this remaining inventory in 2024 for at least the cost price,” CEO Bjorn Gulden said in a statement, leaving the door open to possible profit upgrades.
Shares were down more than 6% in pre-market trading.
Adidas also flagged a “severe impact” from the devaluation of the Argentine peso at the end of the year. Adidas rival Puma also reported weaker results after the peso was devalued by 54% in mid-December.
Adidas reported an operating profit of 268 million euros for 2023, down from 669 million euros a year earlier, but easily beating the 100-million-euro loss previously forecast by the company.
Gulden, in the job since the start of 2023, has been driving a turnaround at the company bruised by its break-up with rapper West, who goes by Ye, which left Adidas with unsold Yeezy shoes worth 1.2 billion euros.
Adidas’ sales in 2023 were 21.4 billion euros including the Yeezy shoes, and 20.6 billion euros excluding them.
($1 = 0.9260 euros)
(Reporting by Helen Reid; Editing by Sherry Jacob-Phillips and Lincoln Feast.)
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