Adidas is bracing for a $1.3 billion loss in revenue and $535 million drop in profit in 2023 if efforts to sell off its inventory of Yeezy-branded sneakers fail.
Ye, formerly known as Kanye West, was once synonymous with Adidas. Now the German sneaker giant is dealing with the fallout of ending its partnership with the rapper and fashion designer last year after he made a series of anti-semitic remarks.
The biggest question facing the company is whether it can repurpose its Yeezy products or if it will be forced to write them off, putting a massive dent in revenue and profits. Regardless of the outcome, Adidas is expecting a challenging year ahead.
“The numbers speak for themselves. We are currently not performing the way we should”, said CEO Bjørn Gulden in a news release. “2023 will be a year of transition to set the base to again be a growing and profitable company."
He added that the company will focus on creating "brand heat" and improving its "product engine." "We need to put the pieces back together again, but I am convinced that over time we will make Adidas shine again. But we need some time," he said.
Shares were down around 9 percent in pre-trading on Friday after the announcement.
More earnings and economic data. Cheddar News takes a peek at next week's Wall Street schedule, including reports from Home Depot, Walmart and Nvidia as well as home sales numbers.
Transit technology company Via raised $110 million in a new round of financing. Clara Fain, chief financial officer of Via, joined Cheddar News to discuss the company's mission to digitize public transit globally.
Over 100,000 job cuts were announced across major industries in January, according to a report. Jon Bell, an employment attorney with Bell Law Group, joined Cheddar News to discuss unemployment benefits and severance packages.
Karen Robbins, senior vice president with UBS Wealth Management, joined Cheddar News to discuss Friday's mixed session as officials hinted at more interest rate hikes.
The Week's Top Stories is a guided tour through the biggest market stories of the week, from winning stocks to brutal dips to the facts and forecasts generating buzz on Wall Street.
A new study predicts that rising energy costs that have followed in the wake of Russia's war with Ukraine could push millions of people around the globe into extreme poverty.
