Adidas on Thursday lowered its 2023 guidance, citing potential losses from ending its sale of Ye branded merchandise. The company terminated its partnership with him in October after the designer and musical artist made a series of offensive and anti-Semitic comments.
An inability to sell the existing stock would lower revenues by 1.2 billion Euros ($1.28 billion) and operating profit by 500 million euros. If Adidas chooses to write off the Yeezy-branded inventory instead, doing so would lower the company’s operating profit by an additional 500 million euros. In light of that potential loss, the company said it’s continuing to review future options to sell the inventory.
If all these circumstances came to pass, Adidas said it would report an operating loss of 700 million euros in 2023. The company also expects one-time costs of up to 200 million euros as part of a strategic review to turn Adidas toward profitable growth in 2024.Retail Dive