Adidas Sees EUR700 Million Loss in 2023 in Case of Yeezy Writeoff

By Joshua Kirby

Adidas could book a major operating loss this year if it writes off Yeezy stock, with sales also expected to decline, the company said Thursday.

The German sporting-goods major's operating loss could amount to 700 million euros ($749.9 million) if it decides not to rebrand and sell existing Yeezy products following a split with label designer Kanye West toward the end of last year.

The potential operating loss also entails EUR200 million of one-off costs, Adidas said. Writing off Yeezy stock would also hit revenue by some EUR1.2 billion and lead to a on-year decline in the high single digits.

The company meanwhile set out preliminary results for 2022, booking sales just above flat on year at EUR22.51 billion, and a major decline in operating profit to EUR669 million.

The company's operating margin slid to just 3%, from 9.4% the previous year, while net profit from continuing operations crashed to EUR254 million from EUR1.49 billion previously.

"The numbers speak for themselves," said recently appointed Chief Executive Bjorn Gulden. "We are currently not performing the way we should."

The coming year "will be a year of transition to set the base to again be a growing and profitable company," Mr. Gulden added.

Write to Joshua Kirby at [e-mail]; @joshualeokirby

(END) Dow Jones Newswires

February 09, 2023 13:05 ET (18:05 GMT)

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