Adidas Will Drop More Yeezys Over the Next Few Weeks
Adidas has resumed its sale of existing Yeezy merchandise, with several product launches set for the coming weeks.
The upcoming releases follow two similar drops in 2023 after Adidas decided to start selling Yeezy merchandise once again after it parted with Yeezy founder Kanye West and his brand last October in light of repeated antisemitic statements. These two successful Yeezy drops lifted net sales by 750 million euros in 2023, compared to more than 1.2 billion in Yeezy revenues in 2022. Overall, Yeezy profits represented about 300 million euros in 2023. Adidas said it donated a “significant” portion of proceeds from these sales to organizations representing people who “were hurt” by Kanye West’s comments.
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As for 2024, Adidas said it will sell its remaining Yeezy inventory, which includes products made in 2022, starting with the launch of the 350 V2 in Steel Grey. Consumers will be able to purchase the products via Adidas’ websites and apps.
Before deciding to sell Yeezy merchandise again in 2023, Adidas weighed a variety of options for what to do with the leftover $1.3 billion (or 1.2 billion euros) worth of Yeezy product, which was projected to yield a potential 500 million euros (or $537 million) hit to operating profit.
“Our consumer, retail and trade research has shown that we can sell this remaining inventory in 2024 for at least the cost price,” Adidas chief executive officer Bjørn Gulden said in a January release, announcing the companies decision to sell more Yeezys in 2024. “This is why we have only written off inventory that was either damaged or very broken in sizes.”
Adidas in January said its sales and operating profits for 2023 beat its guidance, in part because of its resumption of Yeezy sales throughout last year. The German company revealed preliminary results for 2023, which included a 5 percent sales decline to 21.4 billion euros in reported terms. Currency-neutral revenues were flat, ahead of Adidas’ guidance expecting a low-single-digit decline. Revenues were impacted by unfavorable currency effects including the devaluation of the Argentine peso as well as reduced wholesale sales and the halt of the Yeezy business, which cost the company 500 million euros for the year.
Adidas said its decision to continue selling Yeezy merchandise helped it achieve an operating profit of 268 million euros in 2023, ahead of its guidance for an operating loss of 100 million euros.
Looking ahead, Adidas said it expects mid-single-digit growth in currency-neutral sales in 2024, including a high-single-digit growth in currency-neutral sales in the underlying Adidas business. Sales are expected to start off flat in Q1 and then grow in subsequent quarters. Excluding Yeezy, Adidas’ business is projected to be up 10 percent in the second half of 2024. Adidas expects operating profits of 500 million euros in 2024.
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