Here's How the Recent Yeezy Sales Affected adidas
News on this was first published on August 4, 2023.
Update October 20, 2023: adidas have reported their preliminary quarter 3 results, and while their revenues are still down 6 per cent compared to the same period last year, the decrease from the severance with Yeezy is not as severe as projected. It was initially expected that dropping Yeezy product would cost the Three Stripes 500 million euros, but it is reported to be closer to 300 million euros. This is due to the decision to sell off all remaining stock.
Despite this, adidas still need to work towards a completely Yeezy-free business. CEO Bjørn Gulden said, 'To take [Kanye West’s] designs and sell them off later, which technically we could do, is not part of our strategy. Our task is to limit the damage, get rid of the inventory and then build the business later without Yeezy.'
The sales for have come in ‘flat’ for the second quarter, mainly due to the severed ties with . The revenue for this quarter came in at 5.34 billion euros, which is a slight decrease from the 5.6 billion euros brought in the same time last year.
When adidas called it quits on the partnership with Kayne West, they were saying goodbye to what is estimated to be 40 per cent of the company’s annual profits. They are yet to feel the full effect of this, as adidas have recently sold off the remaining Yeezy stock, which brought in around 400 million euros in this quarter.
Despite this flat outlook, the company’s results were still ahead of the market expectations, as analysts had originally predicted adidas would see a sales drop of 9 per cent and a revenue of just over 5 billion euros in this period. The Three Stripes chief executive officer Bjørn Gulden is staying positive, stating ‘We are happy with the way the second quarter developed. 2023 is not about trying to show short-term results’. He also said he didn’t expect to see adidas be ‘good and profitable’ until 2025, most likely once they recover from the severance from Yeezy.