According to Adidas, if Yeezy shoes are not sold, the loss could be $1 billion

The sportswear giant ended its lucrative design partnership with Ye, formerly known as Kanye West, in late October after he made a series of anti-Semitic and racist remarks. Adidas had become heavily dependent on the Yeezy line, which it described as one of the most successful in the history of the industry, and it took weeks of deliberation within the company before it finally ended the partnership. Other retailers like Gap Inc. have moved much more quickly to sever the ties.

Adidas also continues to face challenges in China, where demand for shoes and apparel has slowed due to a consumer boycott and as a result of COVID restrictions.

The weak full-year results and muted 2023 revenue guidance mean new leadership needs to improve execution and brand health, said Poonam Goyal, a senior industry analyst at Bloomberg Intelligence.

“The sales forecast is more than just the 1.2 billion euros in lost Yeezy sales, we believe. It reflects the struggle to generate revenue and lose market share despite a rising global demand for athleisure,” she added.

Adidas American Depositary Receipts fell 9 percent, the strongest in nearly three years.