Adidas’s breakup with the rapper formerly often known as Kanye West and the lack to sell his popular Yeezy shoe line helped it rebound late last 12 months, resulting in a net lack of $540 million.
The fourth-quarter loss, also attributed to higher sourcing costs and falling revenue in China, contrasted with a profit of $225 million in the identical period a 12 months ago, the German footwear and sportswear maker said on Wednesday.
More losses may lie ahead as the corporate anticipates earning $527.5 million this 12 months if it decides to not repurpose the remaining of the Yeezy products it has in stock. The corporate anticipates an operating lack of $740 million in 2023.
Adidas parted ways with West in October following the rapper’s anti-Semitic remarks on social media and in interviews, facing pressure together with other brands to sever ties. The corporate is now struggling to search out a solution to replace its flagship Yeezy line, which analysts said accounted for as much as 15% of its net income.
CEO Bjorn Gulden said in an announcement that 2023 might be a “transition 12 months” and “we will then start constructing a profitable business again in 2024.”
Fourth quarter net sales rose just 1.3% to $5.49 billion in comparison with the identical quarter a 12 months ago, which was held back by roughly $633 million in lost revenue resulting from the choice to stop working with West, who legally modified his name on Ye.
The corporate also reported a decline in revenue in China of around 50% and higher delivery and shipping costs that might not be offset by higher prices.
For the total 12 months, the Herzogenaurach-based German company made a net profit of $673 million with sales that rose 6% to $23.7 billion.
The corporate also assured that it might replacing the highest sales and marketing directors. Global head of sales Roland Auschel will leave the corporate after 33 years and might be replaced by Arthur Hoeld, currently head of the Europe, Middle East and Africa region.
Brian Grevy, head of worldwide brands, will step down on March 31. CEO Gulden will assume responsibility for his product and marketing activities.