The company posted a net loss of EUR 39 million from January to March, compared to a profit of EUR 482 million in the same period last year.
The end of its hugely successful Yeezy range, designed in collaboration with West, impacted sales by approximately €400 million in the quarter.
But global sales weren’t as bad as feared, analysts saw the first signs of improvement, and Adidas share price rose 7.5% in the afternoon on the Frankfurt Stock Exchange.
Adidas suspended its partnership with Kanye West, now known as Ye, in October after the latter made a series of anti-Semitic statements.
The loss of Yeezy, along with declining revenues for its lifestyle brands, “clearly hurts us,” new CEO Bjorn Gulden said in a statement.
But as of this Friday, there was still no news on what the sports company will do with its huge inventory of Yeezy sneakers.
“We are evaluating the options,” Adidas’ current CEO said after the results were announced, but finding a solution will take time because there are “many interested parties”.
The company had announced in February that it could incur an operating loss of €700 million this year if it decided to write off the value of all of its existing Yeezy inventory.
eventful year
Bjorn Gulden, who took over the reins at the company in January after joining rival Puma, said time was needed for the company to turn around.
“2023 will be a difficult year, with disappointing numbers, in which maximizing our financial results in the short term is not our goal,” he said.
The impact of the end of the deal with American rapper West was clearly most felt in North America, where sales fell 20% during the quarter.
They also registered a sharp decline in China, a key market for Adidas that has been hit hard by long periods of lockdown due to covid-19, while there were gains in Latin America and other parts of Asia Pacific.
But net sales remained broadly stable at €5.28 billion, beating market expectations that had fallen, and Bjorn Gulden said the quarter ended “slightly better than we expected”.
The CEO also highlighted the positive evolution in some areas, such as the popularity of the Samba, Gazelle and Campus sneakers.
Source: DN
