Adidas Reiterates Forecast of 10% Earnings Decline in 2023, Proposes Sharp Dividend Cut Due to Yeezy Impact

Adidas AG gets ahead of the transition year and proposes a significantly lower dividend for 2022. That’s because the rapper’s earnings have been hit by a series of challenges, including the departure of his Kanye West-owned Yeezy sneakers from his label.

German sporting goods company

announced on Wednesday that it would offer a payout of 70 euro cents (US$74) per share, up from the previous €3.30. Adidas cut its dividend last month after announcing preliminary results showing net profit from continuing operations fell sharply from €1.49 billion to €254 million.

Adidas repeats its outlook for 2023, showing a decline in organic revenue approaching 10%, resulting in an operating loss of €700 million, in case it decides to write off its remaining Yeezy shares. The loss also includes his one-time strategic cost of €200 million, which the company is trying to turn around.

Newly appointed CEO Björn Gulden said next year will lay the groundwork for a return to profitability.

“We need to reduce inventories and lower discounts,” he said. “Then we can start building a profitable business again in 2024.”

Write to Joshua Kirby at joshua.kirby@wsj.com. @joshualeokirby

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