“The numbers speak for themselves. We’re currently not performing the best way we should always”, Adidas CEO Bjørn Gulden said in a press release.
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Adidas could lose around 1.2 billion euros ($1.3 billion) in revenue in 2023 whether it is unable to sell its existing Yeezy stock.
The German sportswear company scrapped its partnership with rapper and dressmaker Ye, formerly referred to as Kanye West, the face of Yeezy, in October after he made a series of antisemitic comments.
The corporate said late Thursday that’s assessing what to do with the inventory, adding it has already accounted for the “significant adversarial impact” of not selling the products.
Operating profit would drop by around 500 million euros if the corporate fails to shift the products, and Adidas expects sales to say no at a high single-digit rate in 2023. Adidas could opt to write down off its remaining Yeezy products.
Shares sank 11% Friday morning as traders reacted to the announcements.
The corporate also forecast one-off costs of as much as 200 million euros, leaving Adidas’ worst-case scenario for the 12 months as a 700 million euro loss for 2023.
“The numbers speak for themselves. We’re currently not performing the best way we should always,” Adidas CEO Bjørn Gulden said in a press release.
Adidas’ revenues increased 1% in 2022, based on unaudited numbers, while operating profit dropped from almost 2 billion euros in 2021, to 669 million euros in 2022.
