Adidas saw operating earnings dwindle in the first three months of the year as the German sportswear company’s break-up with the rapper formerly known as Kanye West and his popular Yeezy shoe brand cost it 400 million euro (£351 million) in lost sales.
Profit was down to 60 million euro (£52 million) from 437 million euro (£383.7 million) in the same quarter a year ago, while the firm’s profit margin shrank to a bare 1.1%.
Net sales declined 1%, to 5.27 billion euro (£4.6 billion), and would have risen 9% with the Yeezy line, the company said on Friday.
Losing the Yeezy brand is “of course hurting us”, new CEO Bjorn Gulden said in a statement, which did not explain what Adidas would do with 1.2 billion euro (£1.05 billion) worth of unsold Yeezy shoes after the company cut ties with the rapper now known as Ye in October.
The break-up, which followed Ye’s antisemitic comments on social media and in interviews, will reduce earnings by 500 million euro (£439 million) in the coming year, the Herzogenaurach-based company has said.
Mr Gulden did say the results for the Herzogenaurach-based company were “a little better than we had expected” as the company seeks to restart growth and move beyond the breakup with Ye.
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