Adidas Proposes Stable Dividend With Expected Growth in the Second Part of 2024

Adidas announced its proposal for a flat dividend for 2023, with a forecast for growth in the latter part of this year, according to The Wall Street Journal.

Today, the German sports apparel and footwear company disclosed its proposal of a dividend summing up to EUR0.70 per share. The company also revealed its intention to continue its practice of annually distributing dividends to shareholders, targeting a range of 30% to 50% of net income from continuing operations.

This news comes into place after Adidas’ net loss of 75 million euros last year ($82 million), compared to EUR612 million in profit in 2022. Additionally, the company revealed a 5% drop in sales to EUR21.43 billion, as disclosed in January.

The company opted not to write off the majority of its Yeezy inventory and stated in January its scope to sell it at least for the cost price. On Wednesday, Adidas announced its plans for double-digit growth in the second half of the year for its underlying business.

Adidas expects a slowdown in growth during the first half of 2024 because of its efforts focused on reducing what the company identified as high inventories in the North American market.

Adidas CEO Bjorn Gulden said, “We should see some growth already in 1Q, but I expect growth to be stronger in the second half of the year. We still have a lot of work to do, but I feel very confident we are on the right track.”

After the indirect effect on profitability by the termination of its partnership with rapper Kanye West, who is also known as Ye, Adidas has been going through a period of transition.

Gulden additionally explained that Adidas successfully trimmed its inventories by nearly EUR1.5 billion and said that, besides the U.S., the inventories were reported to be at steady levels.

Simultaneously, currency-neutral sales in North America are forecasted to decrease by a mid-single-digit rate in 2024, as sales in Greater China and Latin America are forecasted to experience double-digit growth. Sales are also anticipated to increase in Europe, Japan, and South Korea at a high-single-digit rate compared to the previous year.

The company emphasized that the sale of its Yeezy inventory wouldn’t play a part in its operating profit this year.