“The numbers speak for themselves. We are currently not operating as we should,” 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 if it is unable to sell its existing Yeezy stock.
The German sportswear company ended its partnership with rapper and fashion designer Ye, formerly known as Kanye West, the face of Yeezy, in October after he made a series of anti-Semitic comments.
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The company said late Thursday that it was assessing what to do with inventory, adding that it had already considered the “significant negative impact” of not selling the products.
Operating profit would fall by around 500 million euros if the company fails to move products, and Adidas expects sales to decline at a high single-digit rate in 2023. Adidas could choose to d to cancel its remaining Yeezy products.
Shares fell 9.5% on Friday morning as traders reacted to the announcements.
The company also expects one-time costs of up to €200 million, leaving Adidas’ worst-case scenario for the year at a loss of €700 million for 2023.
“The numbers speak for themselves. We are currently not operating as we should,” Adidas CEO Bjørn Gulden said in a press release.
Adidas’ revenues increased by 1% in 2022, based on unaudited figures, while operating profit fell from nearly 2 billion euros in 2021 to 669 million euros in 2022.
