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Adidas on Wednesday reported a big fourth-quarter loss and slashed its dividend after the costly termination of its partnership with Kanye West’s Yeezy brand in October.
The German sportswear giant posted a fourth-quarter operating loss of 724 million euros ( $763 million ) and a net loss from continuing operations of 482 million euros. The company will recommend a dividend of 70 euro cents per share at its May 11 annual general meeting, down from 3.30 euros per share in 2021.
Currency-neutral revenues declined by 1% in the fourth quarter as a result of the termination of the company’s Yeezy partnership and will decline at a high-single-digit rate across 2023, the company said.
Adidas is projecting a full-year operating loss of 700 million euros in 2023, marking its first annual loss for 31 years. The estimate includes a hit of 500 million euros in potential Yeezy inventory write-off and 200 million euros in “one-off costs.”
Adidas scrapped its highly lucrative partnership with rapper and fashion designer Ye — formerly known as Kanye West, the face of Yeezy — in October, after he made a series of antisemitic comments. The company had previously flagged a severe hit to revenues, if it were unable to shift its huge remaining stock of unsold Yeezy footwear.
The company said underlying operating profit will be “around break-even level,” reflecting the loss of 1.2 billion euros in potential sales from unsold Yeezy stock.
