Adidas has reported a significant 19% increase in revenue at neutral currency rates for the fourth quarter, reaching 5.97 billion euros ($6.34 billion). This performance exceeded the expectations of analysts from LSEG, who had forecasted revenues of 5.72 billion euros. The uptick in sales comes amid a challenging year, marked by the company's decision to cut ties with Ye, the rapper formerly known as Kanye West, following his controversial anti-Semitic comments in 2022.
The termination of the partnership with Ye led to the discontinuation of Adidas' popular Yeezy line. Despite this, the company has shown resilience by planning to sell off its remaining Yeezy inventory by the end of 2024. Chief Executive Bjorn Gulden, who assumed his role in January 2023, has been actively working to distance Adidas from the loss-making Yeezy brand.
In addition to the impressive revenue growth, Adidas reported an operating profit of 57 million euros for the fourth quarter. This marks a significant turnaround from the previous year's loss of 377 million euros during the same period. The company's strategic efforts to expand its market share in North America are noteworthy, especially as Nike experiences declining sales.
Adidas is also making a concerted effort to reduce its reliance on the Chinese market, which has shown signs of weakening. However, challenges remain, as evidenced by a 7% drop in North America sales at currency-neutral rates during the third quarter. Despite these hurdles, the fourth-quarter results reflect Adidas' strong recovery and adaptability.