Adidas reports slowing profits as it continues to navigate Yeezy fallout

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Sportswear giant Adidas has reported decreased profits for financial year 2022 as it suffers the repercussions of the fallout with rapper Kanye West.

For the 12 months to December 31, 2022, Adidas recorded a gross profit of €10.6bn (£9.45bn), 1% less than the €10.7bn (£9.54bn) it made in 2021.

The sportswear giant’s EBITDA fell to €1.8bn (£1.6bn) in the period, down 39% from the previous year. Operating profits plummeted 66% to €669m (£596.32m). Net sales increased 6% to €22.5bn (£20bn) year on year.

This follows Adidas’s profit guidance announcement earlier this year when it warned of a “significant impact” and reduced profits should it write off the Yeezy inventory and decide not to repurpose it.

Adidas chief executive Bjørn Gulden said: “We need to focus on the core of our business, which is design, development, sourcing, marketing, selling and delivering product.

“We should never forget that we are a shoe, apparel, and accessories brand that sells physical product. Everything around that should support this, so right now that means focusing on the product, on how we go to market and being the most service-minded organisation both to our retail partners and the consumer.

“We should be the most-liked brand by both athletes and by those who are influential in our business. We need to create the best product and must always remember that our consumers – although informed globally – still think and act locally.”