LONDON – Adidas said Wednesday that it's donated or is planning to give away more than $150 million to groups fighting antisemitism and other forms of hate from the sales of Yeezy shoes last year after it severed ties with Ye, the rapper formerly known as Kanye West.
The German sportswear brand had 1.2 billion euros ($1.3 billion) worth of popular Yeezy sneakers piled up in warehouses after it broke off its partnership with Ye in October 2022 over his antisemitic and other offensive comments on social media and in interviews.
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Adidas decided to sell some of the remaining shoes in batches, with two releases last year and another that launched late last month, and donate a portion of the proceeds to anti-hate groups.
The company has made donations to the Anti-Defamation League and the Philonise & Keeta Floyd Institute for Social Change, run by social justice advocate Philonise Floyd, the brother of George Floyd.
Net sales of what's left of Adidas' former banner line of sneakers brought in about 750 million euros last year, compared with over 1.2 billion euros in 2022, the company reported.
Of the 300 million-euro profit it earned from the sales of Yeezy shoes last year, the company said it had given away or planned to donate over 140 million euros (about $152 million).
Adidas said deciding to sell a big chunk of its Yeezy inventory and improved operations helped it pull out operating profit of 268 million euros last year, a nearly 60% plunge from the previous year. It blamed a high tax rate for ending the year with a net loss of 58 million euros, a massive turnaround from net income of 254 million euros in 2022.
“Although by far not good enough, 2023 ended better than what I had expected at the beginning of the year," said CEO Bjørn Gulden, who took over the top job last year.
Looking forward, Adidas expects to make about 250 million euros in sales of the remaining Yeezy shoes this year.
But the Herzogenaurach, Germany-based company points to North America as a persistent problem spot, expecting revenue to decline in the mid-single digits this year and grow everywhere else. It said that North America was “particularly affected by the negative Yeezy impact” and that revenue there dropped 16% last year.
Adidas expects to almost double operating profit to about 500 million euros this year despite “macroeconomic challenges and geopolitical tensions.” It plans to further scale up popular shoe lines like Samba that are seeing “extraordinary demand,” launch new ones and get a boost from major sports events like the Paris Olympics this summer.
Adidas shares were up slightly in late morning trading.