“The numbers speak for themselves. We are currently not performing as we should,” said Adidas CEO Bjørn Gulden in a press release.
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Adidas could lose around €1.2 billion ($1.3 billion) in revenue in 2023 if it’s unable to sell its existing Yeezy stock.
The German sportswear company canceled its partnership with rapper and fashion designer Ye, formerly known as Kanye West, the face of Yeezy, in October after he made a series of anti-Semitic comments.
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The company said late Thursday it was reviewing what to do with the inventory, adding it had already considered the “significant negative impact” of not selling the products.
Operating profit would fall by around 500 million euros if the company doesn’t switch products, and Adidas expects sales to fall in the high single digits in 2023. Adidas could choose to write off its remaining Yeezy products.
Shares fell 9.5% on Friday morning as traders reacted to the announcements.
The company also forecast one-off costs of up to 200 million euros, leaving Adidas’ worst-case scenario for the year at a loss of 700 million euros for 2023.
“The numbers speak for themselves. We are not currently performing as we should,” Adidas CEO Bjørn Gulden said in a press release.
Adidas’ revenues increased by 1% in 2022 based on unaudited figures, while operating profit fell to 669 million euros in 2022 from almost 2 billion euros in 2021.