Adidas plans to return to dividend payments and anticipates improved performance in the future
- Adidas proposes flat dividend for 2023
- Growth expected in second half of 2024
- Net loss of 75 million euros in 2023
- Underlying Adidas business to grow at double-digit rate in second half
- Work to reduce elevated inventories in North American market
- Currency-neutral sales in North America expected to decline in 2024
- Sales in Greater China and Latin America expected to grow
- Yeezy inventory sale won’t contribute to operating profit in 2024
- Adidas reaffirms 2024 guidance for operating profit and sales growth
Adidas has announced its proposal for a flat dividend for 2023, signaling its intention to return to its policy of paying annual dividends to shareholders. The company plans to propose a dividend of EUR0.70 per share, with the aim of distributing 30% to 50% of net income from continuing operations. This comes after Adidas reported a net loss of 75 million euros in 2023, compared to a profit of EUR612 million in 2022. The decline in sales, which amounted to 5% and totaled EUR21.43 billion, was also disclosed earlier this year. However, Adidas expects growth to be concentrated in the second half of 2024, with the underlying Adidas business projected to grow at a double-digit rate. The first half of the year is expected to be impacted by efforts to reduce elevated inventories in the North American market. Despite these challenges, Chief Executive Bjorn Gulden expressed confidence in the company’s progress and stated that growth should be stronger in the second half of the year. Adidas has already made significant progress in reducing inventories, with a reduction of almost EUR1.5 billion. Excluding the U.S., inventories are at healthy levels. In terms of regional sales, North America is expected to experience a decline, while Greater China and Latin America are projected to see double-digit growth. Sales in Europe, Japan, and South Korea are expected to grow at a high-single-digit rate compared to the previous year. Adidas has reaffirmed its 2024 guidance, which includes an operating profit of around EUR500 million and mid-single-digit sales growth on a currency-neutral basis. It is important to note that the sale of Yeezy inventory will not contribute to the company’s operating profit this year.
Factuality Level: 8
Factuality Justification: The article provides factual information about Adidas’ financial performance, dividend proposal, and future growth expectations. It does not contain irrelevant information, misleading details, sensationalism, or biased opinions. The information presented is clear and objective, without any major inaccuracies or logical errors.
Noise Level: 3
Noise Justification: The article provides relevant information about Adidas’ financial performance, dividend proposal, and future growth expectations. It includes details about the company’s net loss, dividend policy, inventory management, and regional sales forecasts. The article stays on topic and supports its claims with specific numbers and statements from the company’s CEO. However, it lacks in-depth analysis, antifragility considerations, and accountability of powerful people, which prevents it from receiving a higher rating.
Financial Relevance: Yes
Financial Markets Impacted: Adidas
Presence Of Extreme Event: No
Nature Of Extreme Event: No
Impact Rating Of The Extreme Event: No
Rating Justification: The article pertains to financial topics as it discusses Adidas’ dividend proposal, financial performance, and growth expectations.
Public Companies: Adidas (ADDYY)
Key People: Bjorn Gulden (Chief Executive)
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