Adidas continues to feel the impact of its split with Kanye West and the end of their Yeezy partnership.
According to MarketWatch, today (Mar. 8), Adidas announced plans to slash its 2022 dividend to €0.70 (74 U.S. cents) per share, stemming from the impact of the brand’s decision to sever ties with Kanye West. The German sportswear company’s full-year dividend stood at €3.30 a year earlier.
Adidas also reported fourth-quarter operating losses of €724M for the three months to the end of December. They recorded a profit of €66M in the same period in the year prior. However, the loss was worse than some analyst’s expectations. Bloomberg consensus estimates had seen the loss at €717M.
In addition, Adidas attributed their 1% decline in quarterly revenues to a negative impact of €600M resulting from the termination of their partnership with Kanye West. The discontinuation of the Yeezy brand had a “particularly strong impact” on North American demand, Adidas stated.
Furthermore, Adidas remains undecided as to whether or not to repurpose its Yeezy branded stock. The company repeated the profit warning issued last month that if the merchandise remains unsold, Adidas may be in the hole for about $1.3 billion.
“2023 will be a transition year to build the base for 2024 and 2025,” said chief executive officer Bjørn Gulden in a statement. “We need to reduce inventories and lower discounts. We can then start to build a profitable business again in 2024.”
Meanwhile, Kanye West marked his return to Instagram this week following a ban for antisemitic comments. He shared a post of an image from a Balenciaga fashion show asking his followers to “Write a caption.”