Adidas Expects Smaller Operating Loss in 2023 After Parting Ways with Kanye West's Yeezy Collection

German sportswear firm Adidas AG ADDYY expects a significantly smaller operating loss for FY23 following better-than-expected early sales of its Yeezy stock, which it offloaded after cutting relations with collection creator Ye.

The company's potential write-off from remaining inventory was now €400 million ($442.5 million), down from €500 million, as it trimmed its operating loss forecast for 2023 to €450 million from €700 million.

Also Read: Adidas Receives Orders Worth $565M For Massive Unsold Yeezy Inventory: Report

The sportswear firm also reported a slight outperformance in the underlying Adidas business and still expects underlying operating profit, excluding one-offs related to Yeezy and a more comprehensive ongoing strategic review, to roughly break even for the year, CNBC reports.

After his offensive comments, Adidas ended its partnership with musician Ye, formerly Kanye West, in October 2022. 

After facing flak, Adidas said it would end the production of Yeezy-branded products. 

According to Morningstar analyst David Swartz, Adidas' deal with the brand grew to nearly $2 billion a year for the company, 10% of its revenue.

Price Action: ADDYY shares are trading higher by 3.44% at $101.67 on the last check Tuesday.

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