- On Friday, Adidas' shares fell 11% after the company revealed it was unable to offload its existing Yeezy inventory, resulting in a potential loss of $1.3B in 2023 revenues.
- After the antisemitic comments made by Kanye West, Adidas ended its relationship with him, but the decision to not sell the products had a "significant adverse impact" on their profits. As a result, Adidas' revenues only increased by 1% in 2022, and their profit decreased to $715M.
- Should the company fail to move its products, operating profit could potentially decrease by around 500 million euros and Adidas anticipates sales to reduce at a high single-digit rate in 2023. As an alternative, Adidas might opt to mark off its remaining Yeezy stock.
Why it matters
Adidas has encountered several challenges in the past year, including ending its partnership with Yeezy and the departure of its former CEO. This year, new CEO Kasper Rorsted joined from rival Puma. In March, Adidas closed its shops in Russia due to the invasion of Ukraine and suspended its online store. The company was also impacted by China's strict Covid regulations and resulting lockdowns.