Business

Adidas warns of big earnings after ending partnership with Ye


Kanye West at an Adidas partnership announcement event on June 28, 2016 in Hollywood, California.

beautiful pictures

Adidas on Wednesday cut its full-year guidance after the German sportswear giant ended its partnership with Kanye West’s Yeezy brand.

Company end relationship with Yeformerly known as Kanye West, on October 25 after the musician unleashed a series of insults and protests on social media and in interviews.

Adidas now forecasts net operating income of around 250 million euros ($251.56 million), down from a target of around 500 million euros set on October 20. The company now expects ​currency-neutral revenue for low single-digit growth in 2022, with current gross margins expected to be around 47% for the year.

Adidas reported a 4% year-over-year increase in currency-neutral sales, with double-digit growth in e-commerce in EMEA, North America and Latin America. The company said gross margins fell one percentage point to 49.1% due to “higher supply chain costs, higher discounts and unfavorable market mix”.

Operating profit came in at 564 million euros, while net income from continuing operations was 66 million euros, down from 479 million euros a year ago, “negatively affected by a number of one-time expenses totaling nearly 300 million in value as well as unusual tax impacts in Q3,,” said Adidas.

Adidas is the latest company to remove Kanye West

“This amount differs from the preliminary figure published on October 20, 2022, due to the negative tax impact in the third quarter related to the company’s decision to end its partnership with adidas Yeezy. same size in Q4,” said Adidas.

The company also revealed that it reduced its full-year guidance on October 20 due to “worsening traffic trends in Greater China, higher clearance operations to reduce rising inventory levels as well as total costs.” a one-time fee of about 500 million euros.”

“The market environment changed in early September as consumer demand in Western markets slowed and traffic trends in Greater China worsened,” Adidas CFO Harm Ohlmeyer said in a statement. declare.

“As a result, we see significant inventory build-up across the industry, leading to higher promotional activity for the rest of the year, which will increasingly weigh on our earnings. “

Ohlmeyer said the company has been “encouraged” by “remarkable” enthusiasm for building the FIFA World Cup in Qatar later this month.

news7g

News7g: Update the world's latest breaking news online of the day, breaking news, politics, society today, international mainstream news .Updated news 24/7: Entertainment, Sports...at the World everyday world. Hot news, images, video clips that are updated quickly and reliably

Related Articles

Back to top button