Adidas released third-quarters earning today (Novemer 8, 2023) and provided an update on sales and outlook for Yeezy product left after the German brand severed its contract with Ye (formerly known as Kanye West) in October of last year. Adidas revenue during the quarter was up 1%, aided in part by sales of $375 million in Yeezy sales.
The company is still sitting on approximately $321 million worth of Yeezy inventory. Adidas quietly cancelled a Yeezy launch planned for November 2023 and in its earnings announcement said it was deciding whether to pull all future drops and take a write down on remaining merchandise instead.
“Couple of words about Yeezy,” said Bjørn Gulden. “You know we have had two very successful launches, one in Q2 and one in Q3. We are still sitting on about €300 million of the inventory and we have decided not to have any more launches during Q4 and will then spend the rest of the year then to evaluate what we should do next year.”
There’s been a lot of debate as to why Adidas cancelled the November launch with some speculating the brand wanted to further distance itself from West whose antisemitic statements have come into sharper focus following the start of the Israel-Hamas war. The 46-year-old music creative and CEO was also the subject of a late October, in-depth NY Times profile, which reported additional details on egregious behavior displayed by West that Adidas chose to ignore.
Adidas’ business has improved this year in part thanks to explosive demand for Samba and other terrace sneakers, and it’s also possible the brand has concluded it’s in good enough shape financially that it no longer needs to deal with the blowback of an association with West to meet its financial goals.