For the second time in three months, Adidas is raising expectations as the collection of Yeezy trainers by controversial rapper Kanye West continues to sell smoothly.
When Adidas was forced to end its collaboration with Kanye West late last year after racist statements, the already ailing shoe manufacturer was at a loss. Had all the shoes become unsaleable, it would have immediately generated 700 million euros in losses for the whole of 2023.
New CEO Bjorn Gulden’s decision to sell off existing stocks is now paying dividends: in the second quarter alone, Adidas sold 400 million euros worth of Yeezy trainers, bringing the estimated operating loss down to 450 million euros by July.
This allows Adidas to again raise its forecasts: the company now expects an operating loss of about 100 million euros, after third-quarter sales of about six billion euros. Apart from Yeezy, the Chinese market also did well again and global demand for other models of the brand recovered.
Excluding the Yeezy debacle and the cost of a strategic review, the company is now even counting on an operating profit of 100 million euros this year. CEO Gulden was appointed in January to engineer a turnaround, and seems to have delivered.