(Presidentialwire.com)- After a slew of anti-Semitic comments, Kanye West, now formally known as “Ye,” lost his relationship with Adidas. However, the breakup appears to have hurt the company after their shares dropped by 12% last week and they warned that they could be seeing a loss this year for the first time in about 30 years, according to OANN.
After the split, the German company reportedly underwent a review to decide what to do with the remaining Yeezy products in its inventory. They stated that not selling the products could mean that they will take a financial hit, which means a cut in revenue by around $1.3 billion in 2023. Operating profit will also reportedly take a $534 million hit.
“The numbers speak for themselves. We are currently not performing the way we should,” said CEO Bjorn Gulden.
Writing off the inventory will also amount to an additional $500 million loss in operating profit. Going this route would reportedly lead the company to lose another $213 million as they try to get back to positive growth in 2024.
Analysts at Jeffries reportedly downgraded Adidas’ rating from “buy” to “hold” after Adidas published guidance around the situation. Jeffries cited “challenges in articulating the mid-term profit delivery” as the reason for its new recommendation.
Adidas is considering repurposing its Yeezy products under a different brand. But the company is also facing concerns over mounting inflation in both Europe and the United States which could bring sales down in the future.
Gulden said that 2023 will be a year of transition for the company as they focus on “brand heat.” He added that they will eventually put the pieces back together but will need time to make Adidas “shine again.”
UBS analysts reportedly said that Gulden is the right person for the job, but reiterated that profits may not be expected until 2024.