If it cannot sell its remaining Yeezy inventory, sportswear giant Adidas could lose up to $1.3 billion in revenue in 2023.
CNBC reports the company has faced tough times since parting ways with rapper Kanye West, now known as Ye, in October 2022 over anti-Semitic comments. Adidas previously accounted for the potential negative impact of not selling the product and is currently assessing what to do with the remaining stock.
According to analysts, failing to sell off Yeezys in 2023 could reduce operating profit by nearly $605 million. Additionally, sales are expected to drop at a high single-digit rate this year. As a result, Adidas may have to write off its remaining Yeezy inventory — incurring one-off costs of approximately $242 million. As a result, losses in 2023 could total roughly $750 million.
In response to the news, Adidas CEO Bjørn Gulden released a statement saying that the “numbers speak for themselves. We are currently not performing the way we should.” The announcement immediately affected stocks, with Adidas’ shares falling 9.5%.
This is another financial blow to Adidas’s bottom line as it attempts to solve its Yeezy inventory challenge. It remains uncertain what will happen, but investors and analysts are watching to see if Adidas can turn things around.
