How much money Adidas will lose from its business breakup with Kanye West

How much money Adidas will lose from its business breakup with Kanye West

At the end of October, the German sports firm Adidas announced the end of its commercial relations with the Kanye West rapper, who had a clothing and tennis line known as Yeezy for anti-Semitic comments.

Three weeks after the determination, Adidas reported on Wednesday that it cut the estimate of split your earnings for the remainder of the year as a result of the line dedicated to West.

Forbes financial analysts indicated that cut their 2023 revenue forecast for Adidas in about $398,000,000 due to the disappearance of Yeezy, a substantial economic impact for the brand according to experts.

After what happened with the singer, the company projected a net income of $251,000,000 below the objective goal that exceeds $500,000,000 established on October 20 of this year.

Gross margin is now expected to be around 47% for the year. Despite the hiccups, Adidas reported a 4% year-over-year increase in sales on a currency-neutral basis in the third quarter.

This trend impacts double-digit growth in e-commerce in North America and Latin Americamarkets that are key and fundamental for the German company.

Gross margin fell one percentage point to 49.1% due to “higher supply chain costs, higher discounts and an unfavorable market mix,” the company said.

In a statement, Adidas CFO Harm Ohlmeyer indicated that the market environment changed in early September, as that consumer demand in western markets slowed and traffic trends in China deteriorated further.

“As a result, we saw a significant inventory buildup across the industry, leading to increased promotional activity throughout the rest of the year, which will weigh increasingly on our earnings,” Ohlmeyer said.

Ashley Johnson
Ashley Johnson is the lead reporter for Globe Live Media on things related to Astrology, Lifestyle and Music. Being a fitness enthusiast, her background involves growing up in Beverly Hills, where She often interacts with famous Artists and also talks about their ways for a Healthy Lifestyle. She is in fact a profound Yoga student. You can be well assured about the authenticity and quality of Lifestyle, Health, and Music reports published by her.