Adidas Proposes Flat Dividend as 2024 Growth Expected in Second Half — Update

By Pierre Bertrand

Adidas said it will propose a flat dividend for 2023 and that growth this year is expected to be geared toward the second half.

The German athletic apparel and footwear company on Wednesday said it would propose a dividend of EUR0.70 a share, and that it plans to return to its policy of paying annual dividends to shareholders in the range of 30% to 50% of net income from continuing operations.

That comes after Adidas posted a 75 million-euro net loss ($82 million) last year compared with EUR612 million in profit in 2022, on sales that, as disclosed in January, declined 5% to EUR21.43 billion.

The company, which chose not to write off most of its Yeezy inventory, and said in January that it instead intended to sell it off for at least the cost price, said Wednesday that it expected its underlying Adidas business to grow at a double-digit rate in the second half of the year.

Growth in the first half of the year will be hurt by work to reduce what Adidas said was elevated inventories in the North American market.

"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," Chief Executive Bjorn Gulden said.

The company has been in transition after the collapse of its partnership with rapper Kanye West, known as Ye, and following a decrease in profitability.

Gulden added that Adidas had managed to reduce its inventories by almost EUR1.5 billion and that, excluding the U.S., inventories were at healthy levels.

Meanwhile, currency-neutral sales in North America are expected to decline at a mid-single-digit rate in 2024, while in Greater China and Latin America they are expected to grow at a double-digit rate. They are also expected to grow in Europe, and in Japan and South Korea at a high-single-digit rate versus the prior-year level.

Adidas reaffirmed that the sale of its Yeezy inventory wouldn't contribute to its operating profit this year.

As previously disclosed, Adidas confirmed its 2024 guidance for around EUR500 million in operating profit and for currency-neutral sales to grow at a mid-single-digit rate.

Write to Pierre Bertrand at pierre.bertrand@wsj.com

(END) Dow Jones Newswires

March 13, 2024 04:44 ET (08:44 GMT)

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