Adidas reveals plans to sell remaining Yeezy stock in latest trading update

Adidas will not write off the majority of its unsold Yeezy stock as the brand plans to sell the remaining inventory from its defunct partnership with Kayne West for at least the cost price.

The sportswear giant terminated its partership with the rapper and fashion designer, who is also known as Ye, in 2022 after he made a series of offensive and antisemitic comments.

Adidas said its finances were impacted last year by the discontinuation of the Yeezy business, as well as "significantly reduced sell-in to the wholesale channel as part of the company’s initiatives to reduce high inventory levels".

Despite these challenges, Adidas reported an operating profit of £228 million (€268 million) for the year. 

"The improvement is due to the better operating business of around €100 million and the decision to not write off €268 million of Yeezy inventory," chief executive Bjørn Gulden said.

Bjørn Gulden, CEO of Adidas

Gulden joined Adidas from Puma in January 2023 to lead the business into a "new era of strength" after the Yeezy brand left it with unsold stock worth around £1 billion (€1.2 billion).

The brand sold some of its Yeezy stock last year, but net sales were around £384 milliom (€450 million) lower than in 2022 - totalling £640 million (€750 million) in comparison to £1 billion (€1.2 billion) the previous year.

Adidas said consumer, retail and trade research has shown that it can now sell the remaining Yeezy stock for "at least" the cost price.

The latest outlook still included a potential write-off of its remaining Yeezy inventory in an amount of around £256 million (€300 million).

In reported terms, the company said total sales declined 5% to £17.9 billion (€21 billion) in 2023. This reflects the negative translation impact from unfavourable currency movements, which are expected to "remain a drag on the company’s top-line development in 2024"

"We do of course know that our financial performance is not good. But we are on the way of making adidas a good company again. As we said from the beginning, we just need the time to solidly build it up again. I feel that the attitude and agility in our teams are back and that we are showing the old adidas DNA again," added Gulden.

"This year is the next building block needed to bring adidas back to be a company with double-digit growth and 10% operating margin."