Adidas revealed a large fourth-quarter loss and reduced its dividend on Wednesday, following the costly severance of its collaboration with Kanye West’s Yeezy brand in October.
The German sportswear conglomerate reported an operational loss of 724 million euros ($763 million) and a net loss from continuing operations of 482 million euros in the fourth quarter. During its annual general meeting on May 11, the business will suggest a dividend of 70 cents per share, down from 3.30 euros per share in 2021.
Currency-neutral revenues fell by 1% in the fourth quarter due to the end of the business’s Yeezy collaboration and will fall by a high-single-digit pace until 2023, according to the company.
Adidas anticipates a 700-million-euro operational deficit in 2023, marking the company’s first annual loss in 31 years. The projection includes a 500-million-euro impact for future Yeezy inventory write-offs and a 200 million euro hit for “one-time charges.”
Adidas ended its lucrative association with musician and fashion designer Ye — formerly known as Kanye West, the face of Yeezy — in October, following a string of antisemitic statements. The business has previously warned of a significant drop in income if it was unable to sell its massive remaining stock of unsold Yeezy sneakers.
The underlying operational profit will be “roughly break-even,” the business stated, indicating a loss of 1.2 billion euros in potential sales from unsold Yeezy stock.
Adidas shares fell 1.7% in European morning trade, but are still up more than 11% year to date.