Adidas Reports 2023 Losses Linked to Kanye Fallout

Adidas has reported losses from the fallout from terminating its collaboration with Kanye West. The partnership ended after the rapper sparked controversy with anti-Semitic remarks on social media, halting the lucrative Yeezy trainer line and leaving the company burdened with unsold stock. 

The sportswear giant reported a loss of 75 million euros for 2023, a steep fall from the 612 million euros profit of the previous year. Revenue dipped by 5% to 21.4 billion euros, with a significant blow in the US market due to the discontinuation of Yeezy sales. 

Despite efforts to offload Yeezy inventory, generating 750 million euros from two sales in 2023, revenues remained below the 1.2 billion euros mark of 2022. Adidas anticipates selling off the remaining Yeezy stock at cost, expecting around 250 million euros in revenue.

While North American sales declined, a surge in Chinese sales provided a silver lining amid challenging COVID-19 restrictions. The company’s strategy to promote classic Adidas trainers like Samba, Gazelle, and Campus yielded positive sales growth. 

Adidas projects a rebound in 2024, anticipating mid single-digit sales growth and an operating profit doubling to 500 million euros compared to 2023. With Germany hosting the European football championships followed by the Olympics in Paris, additional sales from jerseys and related merchandise are anticipated. Following the muted earnings announcement, Adidas shares remained relatively stable in Frankfurt.