Adidas’ Yeezy crisis has hit the company hard — but its first-quarter financials were not as bad as expected.
The sportswear giant reported $5.82 billion in Q1 2023 revenue — a 1% dip from $5.85 billion a year prior.
Those numbers actually outperformed projections from financial analysts, who expected a 4% drop, according to consensus estimates compiled by the company. Adidas also reported that it had an operating profit of $66.19 million, which beat analyst projections by $16.55 million.
Since cutting ties with Ye — formerly known as Kanye West — in October due to the rapper’s public antisemitic remarks, Adidas has been struggling to figure out what to do with the mountain of unsold Yeezy sneakers in its inventory.
CEO Bjørn Gulden admitted that the loss of the Yeezy brand is “of course hurting us.”
Earlier this week, a group of Adidas shareholders filed a class-action lawsuit against the company, saying it should have known better than to partner with Ye.
With superstar Beyoncé also leaving the brand in March, the company has turned to its other product lines to lift sales: Adidas has seen “extraordinary demand” for its Samba, Gazelle, and Campus brands and has begun producing them at larger scale.