Adidas' split from rapper Ye, formerly known as Kanye West, could cost the company some big bucks.
The German sportswear company said Thursday that itcould loseabout$1.3 billionin revenue in 2023 if it's unable to sell its existing Yeezy inventory, and operating profit would fall by about $535million.
Adidas cut ties with Ye last October because of hisantisemitic remarks on social media and ended the production of Yeezy-branded products. At the time, the company called Ye's comments "unacceptable, hateful and dangerous."
As Adidas decideswhat to do with its existing Yeezy stock, it said its financial guidance for 2023 "accountsfor the significant adverse impact" of not selling the merchandise.
The company facesan operating loss of nearly $750million in 2023 if it can't repurpose the products and writes off existing Yeezy inventory.
"The numbers speak for themselves," Adidas CEO Bjørn Gulden said in a statement.
"We are currently not performing the way we should."
Report:Adidas scrambling to sell $530 million in Yeezys after cutting ties with Ye
Yeezy inventory:Adidas will continue to sell Ye's shoe designs without Yeezy name
Adidas and Ye first teamed up in 2013and cemented their alliance in 2016with what the company described as the "most significant partnership ever created between a non-athlete and an athletic brand."
After ending the partnership, Adidas said it would try to sell the apparel without the Yeezy name and branding.
Adidas' stock price closed Friday at $74.61, down by 0.73%.
"We need to put the pieces back together again, but I am convinced that over time we will make Adidas shine again,"Gulden said. "But we need some time."
