ADDDF - Adidas stock slides as Yeezy inventory overhang hits sales profits

Adidas ( OTCQX:ADDYY ) shares slumped on Friday after the company warned about an outsized impact on the bottom line resulting from the company’s severed ties with Kanye West.

According to a company statement, the company’s decision not to sell existing Yeezy stock is due to lower revenues by around €1.2B and cut operating profits by about €500M this year. As such, full-year sales are expected to drop at a “high-single-digit rate in 2023” while operating profits hit “around the break-even level”.  The German footwear and apparel giant said it expects one-off costs of up to € 200M in 2023 related to the product line.

“The numbers speak for themselves. We are currently not performing the way we should,” CEO Bjørn Gulden said bluntly. “2023 will be a year of transition to set the base to again be a growing and profitable company.”

Shares of Adidas fell over 12% during the European afternoon session.

Read more on the company’s tumultuous relationship with the controversial rapper .

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