Adidas Predicts 2024 Operating Profit Leap After Kanye West Break-Up
German sportswear giant Adidas is poised for a substantial surge in operating profit, projecting a nearly twofold increase to approximately 500 million euros ($542.3 million) this year. The optimistic forecast comes in the aftermath of Adidas’ separation from rapper Kanye West and the discontinuation of its Yeezy business.
According to an unscheduled preliminary earnings announcement, Adidas recorded an operating profit of 268 million euros in 2023. While this figure represented a decline from the previous year’s 669 million euros, it significantly surpassed the previously projected loss of 100 million euros, as stated by CEO Bjorn Gulden.
Gulden, at the helm since the beginning of 2023, has been instrumental in steering a revitalization at Adidas, particularly after the fallout from its association with rapper Kanye West, known as Ye. This separation resulted in Adidas being left with unsold Yeezy shoes valued at 1.2 billion euros.
Adidas attributed a better-than-expected fourth quarter to a strategic decision not to write off the majority of its Yeezy inventory, saving 300 million euros. Instead, the company plans to sell the remaining Yeezy products at cost, contributing to the positive outlook for the upcoming fiscal year.
