Adidas (OTC:ADDYY) saw its shares slip 1.4% in Frankfurt trading Wednesday after the company released its financial results for the fiscal fourth quarter and warned of a sales decline in 2024.
For the fiscal Q4, the sportswear and footwear maker reported a loss per share of €2.13, compared to a loss per share of €2.87 in the year-ago period. Net sales fell 7.6% year-over-year to €4.8 billion.
Operating loss was reported at €377 million, notably lower than the €724 million loss reported in the same quarter the previous year.
Adidas’s board proposed a flat dividend of €0.70 euros per share.
Looking ahead, the company expects currency-neutral sales in North America to drop to a mid-single-digit rate in 2024. Worldwide, sales are projected to witness mid-single-digit growth despite continuing “macroeconomic challenges and geopolitical tensions,” Adidas said.
In their note covering the report, UBS analysts said:
“Despite Q4 numbers being known, we believe the incremental details, which point to rapidly accelerating brand momentum, should be taken well by the market confirming the conservative outlook for FY,” they wrote.
Key factors pointing to this acceleration include an expected positive performance in the fiscal Q4, driven by both underlying factors and recent Yeezy releases; an 8% increase in footwear sales in Q4, with double-digit growth excluding Yeezy; a 9% rise in direct-to-consumer sales (excluding online) with double-digit growth in full-price stores; and finally, a significant 24% year-over-year reduction in inventories.
“Although some may be disappointed with no outlook upgrade despite the recent launch of Yeezy drops; we believe it is likely to be reflected in outlook once the drops complete,” analysts wrote.