If Adidas is unable to sell their remaining Yeezy supply, they could lose over 1.2 billion euros ($1.3 billion) in sales in 2023.
The German sportswear company said it was assessing what to do with the inventory, adding it has already accounted for the “significant adverse impact” of not selling the products.
According to reports, “Adidas’ revenues increased by 1% in 2022, based on unaudited numbers, while operating profit dropped from almost 2 billion euros in 2021, to 669 million euros in 2022.”
This comes after the global company cut ties with musician Ye, also known as Kanye West, in October as a result of antisemitic remarks he had made on social media.
According to CNBC, “It is projected that operating profit would drop by around 500 million euros if the company fails to shift the products, and Adidas expects sales to decline at a high single-digit rate in 2023. Adidas could opt to write off its remaining Yeezy products.
The company’s shares sank by 11 per cent on Friday morning as traders reacted to the announcements.
Adidas also forecast a one-off cost of up to 200 million euros, leaving it Adidas’ worst-case scenario for the year as a 700-million-euro loss for 2023.”
The company’s CEO Bjørn Gulden said in a press that, “The numbers speak for themselves. We are currently not performing the way we should”.