Adidas and Ye Partnership Break-up Caused Adidas a drop of 5 percent in US Market; company says

Portland, OR: Athletic apparel and footwear manufacturer giant Adidas reported a financial loss of 75 million euros ($82 million) in 2023, with a portion of the loss attributable to a drop in sales from its Yeezy brand collaboration with rapper Ye (formerly Kanye West).

In October 2022, the corporation cut ties with Ye due to his alleged antisemitism and other forms of hate speech. Back then, the business estimated that the change would eat into their net income that year by 250 million euros. On Wednesday, Adidas announced their financial results for the year 2022, which came to 612 million euros.

In an announcement made at the beginning of the year, the firm stated its intention to sell all Yeezy products at cost rather than write them off completely. The year 2023 was characterized by the firm as a year of transformation.

The firm reported a 5% reduction in revenues to 21.4 billion euros, with a fall in North American sales of 5.2 billion euros in 2023 compared to 6.4 billion euros in 2022, which was impacted by the conclusion of the Yeezy collaboration.

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“From a market perspective, currency-neutral revenues in North America declined 16 [percent] as this market was particularly affected by the negative Yeezy impact as well as the company’s conservative sell-in strategy to reduce high inventory levels,” the company said.

“This top-line guidance assumes that Adidas will sell the remaining Yeezy inventory at cost, which would result in sales of around 250 million [euros] in 2024. This compares to Yeezy revenues of around 750 million [euros] in 2023,” it said.

“We should see some growth already [in the first quarter], but I expect growth to be stronger in the second half of the year,” Gulden said. “We still have a lot of work to do, but I feel very confident we are on the right track. We will bring Adidas back again. Give us some time and we will again say – we got this!”

The business predicted a currency-neutral sales increase in the mid-single digits for 2024. The business predicted a revenue decline in the mid-single digits for the North American market this year.

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