Tuesday October 3, 2023

Adidas Beats Revenue Expectations Despite Costly Yeezy Struggles

  • The sportswear giant reported a 1% dip in year-over-year Q1 revenue — even though analysts predicted a 4% drop.
  • CEO Bjørn Gulden admitted that the loss of the Yeezy brand is “of course hurting us.”
A view of the outside of Adidas' flagship store in Shanghai.
Adidas
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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.

Apr 29, 2023; Columbus, Ohio, United States; Columbus Crew forward Cucho Hernandez (9) fights Inter Miami defender Serhiy Kryvtsov (27) for the ball during the first half of the MLS soccer game between Columbus Crew and Inter Miami at Lower.com Field on Saturday night.

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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.

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