Adidas slashes 2023 loss forecast on strong Yeezy sales

German sportswear brand Adidas expected a significant operating loss for the year after ending its partnership with musician Ye, formerly known as Kanye West. However, the company now expects to lose just €450 million, thanks to better-than-expected early sales of its Yeezy stock.

Adidas's shares rose 6.3% on the news. The company also reported a slight outperformance in the underlying Adidas business, with underlying operating profit expected to roughly break even for the year.

The company said that the better-than-expected sales of Yeezy stock were due to a "remarkable markup" that the brand still commands. Analysts at Jefferies estimated that the €100 million inventory drop added €450 million to Adidas's top line and boosted sales by 8%.

Adidas ended its partnership with Ye in October 2022 after he made a string of offensive and antisemitic comments. The company said that it would sell the inventory and donate a "significant amount" of the proceeds to groups including the Anti-Defamation League and the Philonise and Keeta Floyd Institute for Social Change.

Adidas signed a deal to manufacture and distribute items from the Yeezy clothing line in 2016. The brand grew to bring in nearly $2 billion a year for the company, 10% of its revenue. 

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