The sale of Yeezy merchandise generated around $437 million (€400 million) in revenue for Adidas in the second quarter of 2023, according to the company’s latest earnings report, as the sports apparel giant attempts to sell off remaining stock of the brand linked to rapper Kanye West, with whom the company snapped ties last year following a series of antisemitic outbursts.
A sign marks the location of an Adidas store inside of a shopping mall in Chicago.
The company said its second-quarter revenue benefited from an “initial product drop” of its remaining Yeezy inventory.
The $437 million worth of sales was “largely in line” with Yeezy sales during the same quarter last year, showing that the controversy around Kanye had done little to dampen interest in the Yeezy brand.
All Yeezy sales during this quarter were carried out through the company’s website and app, resulting in the company’s “direct-to-consumer” revenue growing 16% year over year.
Despite this, the company noted that its “discontinuation of the regular Yeezy business” still cost the company around €400 million in the first half of 2023.
A potential write-off of the company’s remaining Yeezy inventory would cost the company a further €400 million, slightly down from the estimate of €500 million in its first-quarter earnings.
$491.5 million. That is the total operating loss the company is projecting for 2023 if all adverse scenarios, including taking a write-off on the remaining Yeezy inventory, materialize. Aside from the potential, Yeezy write-off the company is expecting an additional $218 million loss related to a “strategic review” of the company. This is down significantly from the company's Q1 estimates of $771 million.