If it can’t sell its remaining Yeezy stock, sportswear giant Adidas could lose up to $1.3 billion in revenue by 2023.
CNBC reports the company has been going through some rough times since parting ways with rapper Kanye West, now known as Ye, in October 2022 over anti-Semitic comments. Adidas was previously responsible for the possible negative impact of not selling the product and is currently assessing what to do with the remaining stock.
Analysts say not selling Yeezys in 2023 could cut operating profit by nearly $605 million. In addition, sales are expected to fall by high single digits this year. As a result, Adidas may have to write off its remaining Yeezy stock – with a one-time cost of approximately $242 million. As a result, losses could reach about $750 million by 2023.
In response to the news, Adidas CEO Bjørn Gulden released a statement saying that “the numbers speak for themselves. We are not performing as we should at the moment”. The announcement had an immediate stock impact, with Adidas shares falling 9.5%.
This is another financial blow to Adidas as it tries to solve its Yeezy supply challenge. It remains uncertain what will happen next, but investors and analysts are looking to see if Adidas can turn things around.