How Adidas is still overshadowed by Ye’s ghost

Adidas is happy with a year without growth. The debacle with Ye and the fall of the Argentine peso proved quite costly, so the sportswear brand is now going to sell its remaining Yeezy trainers anyway.

Peso and Ye

CEO Bjørn Gulden admitted that the results were not good: sales remained almost stable in 2023 (excluding currency effects). Including these, sales fell 5 % to 21.4 billion euros. In the fourth quarter, the Argentine peso plummeted, something rival Puma also suffered badly from.

Still, the figures are slightly better than Adidas expected beforehand. The sportswear brand sold significantly less through wholesale last year, a side effect of efforts to reduce inventories. The biggest setback was Kanye (Ye) West’s brand Yeezy: by ending its very successful collaboration with the controversial celebrity, Adidas lost almost half a billion euros. Without the “Yeezy effect”, sales would have increased by 2 %.

Although gross margin rose by 0.2 percentage points to 47.5 %, operating profit in 2023 dropped from 669 million to 268 million euros. Originally, however, Adidas feared an operating loss of 100 million euros. CEO Gulden has now decided not to write off the remaining Yeezy stock after all: instead, he wants to continue selling the shoes throughout the year. Partly as a result, the company expects sales growth around 5 % in 2024, but unfavourable currency effects are expected to weigh heavily on profitability. Adidas now envisages an operating profit of around 500 million euros.