Overview

• Adidas is considering a $320M write-off of unsold Yeezy inventory following the end of its partnership with rapper Kanye West, also known as Ye, amid controversial antisemitic comments made by the artist.
• As part of efforts to offload the Yeezy inventory, Adidas launched two sales over the summer, earning approximately $813M in total; the company also donated some proceeds to charitable organizations.
• Despite the successful sales, the discontinuation of the regular Yeezy business resulted in a nearly $480M drag on the year-to-year comparison during the first nine months of the year.
• CEO Bjorn Gulden referred to a potential write-off as the 'financially worst case', however, no decisions have been made on this matter as the company continues to explore options for offloading the remaining inventory.
• Hopes for further releases of the product in 2023 and potential subsequent donations from proceeds are under consideration; however, the company's financial forecast has been influenced by this uncertainty.