Adidas may suffer its first loss in 31 years because of tainted Yeezy sneaker stocks.
The new CEO, Bjorn Gulden said on Thursday that the company needed time to “put the pieces back together” as it prepares for its first operational loss in 31 years.
The statistics speak for themselves.
We are currently underperforming,” said Adidas CEO Bjorn Gulden, who was appointed in November as part of efforts to turn the company around.
After markets closed, the German sportswear company issued its fourth profit warning since July. warning investors that it could end up with an operating loss of up to €700 million if it cannot sell its remaining stock of Yeezy sneakers.
After its business partner caused an international outcry with racist and xenophobic remarks in October, the group decided to abandon the highly profitable brand it had been operating with rapper and fashion designer Kanye West.
It warned that its decision would cost it approximately €1.2 billion in annual sales and €500 million in operating profit this year.
The group stated that an internal review into what to do with unsold Yeezy merchandise was still ongoing.
It warned that if it had to write off all remaining inventory, the negative financial impact could double.
Leaving the group with an operating loss of €700 million in 2023.
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