Adidas UK has reported a notable decline in its sales revenue for 2023.
- The company’s turnover fell to £1.15bn, down from £1.23bn in 2022.
- Wholesale and online sales experienced significant drops, contributing to the overall decrease.
- There was, however, a positive growth in retail store sales by £14.9m.
- Adidas remains optimistic about future prospects despite current challenges.
During its recent financial year, Adidas’s UK division encountered a sales reduction of over £100m, marking a downturn from a turnover of £1.23bn in 2022 to £1.15bn in 2023. The downturn was primarily influenced by a significant £88m decrease in wholesale revenue and a £37.7m drop in online sales.
Despite these declines, the company reported a £14.9m increase in revenues from its retail outlets, indicating a positive trend in this segment. According to the accounts presented to Companies House, while the wholesale sector’s revenue diminished from £851m to £753m, and online sales reduced from £293.6m to £255.8m, retail sales showed a growth from £91.4m to £106.4m.
Adidas UK’s pre-tax profit also declined from £37.4m to £30.8m during this period. Endorsed by the directors, the company’s statement acknowledged a challenging start to 2024 due to high inflation, rising interest rates, and geopolitical instabilities. Nevertheless, Adidas remains positive about its future outlook, driven by high consumer demand for its products, especially those aligned with the terrace trend in lifestyle.
Anticipating significant sporting events like Euro 2024 and the Paris Olympic Games, Adidas expects a commercial boost in its performance. The company emphasised its commitment to strengthening customer relationships and continuing its business development efforts. These strategies include investments in product innovation and marketing across the UK, where it focuses on engaging customers via retail and e-commerce platforms.
Additionally, these UK results come after the broader group’s enhanced full-year guidance due to unexpectedly favourable outcomes in the second quarter of the current financial year. The group forecasts its operating profit to reach approximately €1bn (£883.2m), revising its previous projection from €700m (£583.4m).
Adidas remains confident in overcoming current challenges with a positive outlook for upcoming financial periods.
