In 2023, Adidas might lose out on sales of more than 1.2 billion euros ($1.3 billion) if they are unable to sell their existing Yeezy supply.
The German sportswear company said that it had already considered the “significant adverse impact” of not selling the items when it was considering what to do with the inventory.
This comes after the multinational corporation terminated ties with rapper Ye, formerly known as Kanye West, in October due to a number of antisemitic comments he had made.
If the company cannot shift the goods, operational profit is expected to decrease by around 500 million euros, and Adidas projects a high single-digit sales decline in 2023.
Adidas could opt to write off its remaining Yeezy products, CNBC said.
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The company’s shares sank by 11 per cent on Friday morning as traders reacted to the announcements.
Adidas also forecast a one-off cost of up to 200 million euros, leaving it Adidas’ worst-case scenario for the year as a 700-million-euro loss for 2023.
“The numbers speak for themselves. We are currently not performing the way we should,” Adidas CEO Bjørn Gulden said in a press release.
Adidas’ revenues increased by 1% in 2022, based on unaudited numbers, while operating profit dropped from almost 2 billion euros in 2021, to 669 million euros in 2022.
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