Unsold Yeezy Stock Causes Adidas Shares to Tank

It is estimated that Adidas will lose approximately 1.2 billion euros ($1.3 billion) in revenue if it is unable to sell its existing Yeezy stock in 2023.

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After a series of antisemitic comments made by rapper and fashion designer Ye, formerly known as Kanye West, the face of Yeezy, in October, the German sportswear company canceled its partnership with him.

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Late Thursday night, the company released a statement stating that they are currently assessing what to do with their Yeezy inventory, adding that they have already factored in the "significant adverse impact" of not being able to sell them.

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A failure by Adidas to shift these products would result in an operating profit drop of about 500 million euros, and Adidas predicts that sales will decline at a high single-digit rate in 2023 if the company fails to shift the products. There is a possibility that Adidas could opt to write off the remaining Yeezy products.

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Following the announcements, shares fell 11% Friday morning.

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As Adidas forecasted one-off costs in the range of 200 million euros for 2023, Adidas' worst-case scenario would result in a loss of 700 million euros for the year.

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“It is clear from the numbers that they speak for themselves. Currently, we are not performing in the way that we should be," Adidas CEO Bjørn Gulden said in a press release.

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As of 2022, Adidas' revenues increased by 1%, according to unaudited numbers, while its operating profit dropped from almost 2 billion euros in 2021 to 669 million euros in 2022, according to unaudited numbers.