A fashion week guest seen wearing red Adidas yeezy shoes, outside paul and joe during London Fashion Week September 2022 on September 17, 2022 in London.
Jeremy Moeller / Contributor / Getty Images
German sportswear giant Adidas on Monday said it expects a significantly smaller operating loss for the year after recording better-than-expected early sales of its Yeezy stock, which it is offloading after cutting ties with collection creator Ye.
Shares of Adidas were 6.3% higher at 10:22 a.m. BST Tuesday after the company said its potential write-off from remaining inventory was now тВм400 million ($442.5 million), down from тВм500 million, as it trimmed its operating loss forecast for 2023 to тВм450 million from тВм700 million.
The company also reported a slight outperformance in the underlying Adidas business and said it still expects underlying operating profit, excluding one-offs related to Yeezy and a wider ongoing strategic review, to roughly break even for the year.
Adidas ended its partnership with musician Ye, formerly known as Kanye West,┬аin October 2022 after he made a string of offensive and┬аantisemitic comments. After several weeks of criticism online, Adidas called Ye’s comments “unacceptable, hateful and dangerous” and said it would end production of┬аYeezy branded products, which include footwear and clothing, and stop all payments to Ye and his companies.┬а
That left the question of what the company would do with its existing Yeezy stock.
In May, Adidas announced it would sell the inventory and donate a “significant amount” of the proceeds to groups including the Anti-Defamation League and the┬аPhilonise and Keeta Floyd Institute for Social Change.
Adidas┬аsigned a deal to┬аmanufacture and distribute items from the Yeezy clothing line in 2016, with the brand growing to bring in nearly $2 billion a year for the company, 10% of its revenue,┬аaccording to┬аMorningstar analyst David Swartz.
Adidas share price.
