Adidas expects a high single-digit decline in sales in 2023. The sporting goods maker’s revenue grew by one per cent in currency-neutral terms in 2022.

Writing off the inventory altogether would lead to an additional 500 million euro drop in operating profit along with one-off costs in 2023 of up to 200 million euros as part of a review to return to profitable growth in 2024.

In 2022, Adidas revenues increased one per cent in currency-neutral terms.In reported terms, sales were up six per cent. The company’s gross margin reached a level of 47.3 per cent. In 2021 it was 50.7 per cent. In 2022 operating margin was three per cent. The company expects 2023 to be a year of transition to set the base to again be a growing and profitable company. Full focus will be put on the consumer, retail partners and employees.

The company’s underlying operating profit is projected to be around the break-even level.While the company continues to review future options for the utilization of its Yeezy inventory, this guidance already accounts for the significant adverse impact from not selling the existing stock. This would lower revenues and operating profit for this year.