Adidas Warns of More Profit Damage Due to Unsold Yeezy Inventory

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  • Adidas AG ADDYY said the unsold Yeezy inventory would lower revenues by around € 1.2 billion and operating profit by around € 500 million in 2023.
  • Against this background, Adidas expects currency-neutral sales to decline at a high-single-digit rate in 2023.
  • The company's underlying operating profit is projected to be around the break-even level. 
  • In addition, Adidas expects one-off costs of up to € 200 million in 2023 as a part of a strategic review the company is currently conducting aimed at reigniting profitable growth as of 2024. 
  • If all the above projections are likely to come true, the company would expect to report an operating loss of € (700) million in 2023.
  • In reported terms, sales were up 6% to € 22.51 billion in 2022.
  • The numbers speak for themselves. We are currently not performing the way we should", said Adidas CEO Bjørn Gulden.
  • In November, Adidas said it would end the production of Yeezy-branded products and stop all payments to Kanye West and his companies in October 2022.
  • The split came after the rapper's antisemitic speech.
  • RelatedAdidas Severs Ties With Kanye West Over Rapper's Antisemitic Remarks, Sees $247M Impact From Development In 2022
  • Price Action: ADDYY shares closed lower by 8.96% at $75.16 on Thursday.
  • Photo Via Company
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