Good Comes From Sale of All Those Piled-Up Yeezys

Adidas said Wednesday that it has donated or is planning to give away more than $150 million to groups fighting antisemitism and other forms of hate from the sales of Yeezy shoes last year after it severed ties with Ye, the rapper formerly known as Kanye West. The German sportswear brand had $1.3 billion worth of popular Yeezy sneakers piled up in warehouses after it broke off its partnership with Ye in October 2022 over his antisemitic and other offensive comments on social media and in interviews, reports the AP. Adidas decided to sell some of the remaining shoes in batches. How that panned out:

• The releases: There were two releases last year and another that launched late last month; a portion of the proceeds were directed to the Anti-Defamation League and the Philonise and Keeta Floyd Institute for Social Change, run by social justice advocate Philonise Floyd, the brother of George Floyd. Looking forward, Adidas expects to make about $275 million in sales of the remaining Yeezy shoes this year.
• The Yeezy numbers: Net sales of what's left of Adidas' former banner line of sneakers brought in about $820 million last year, compared with over $1.3 billion in 2022, the company reported. Of the $325 million profit it earned from the sales of Yeezy shoes last year, the company said it had given away or planned to donate about $152 million.

• The company overall: Adidas said deciding to sell a big chunk of its Yeezy inventory and improved operations helped it pull out operating profit of $293 million last year, a nearly 60% plunge from the previous year. It blamed a high tax rate for ending the year with a net loss of $63 million, a massive swing from net income of $278 million in 2022.
• Standout quote: "Although by far not good enough, 2023 ended better than what I had expected at the beginning of the year," said CEO Bjorn Gulden, who took over the top job last year.

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• Its North American headache: The company based in Herzogenaurach, Germany, points to North America as a persistent problem spot, expecting revenue to decline in the mid-single digits this year and grow everywhere else. It said that North America was "particularly affected by the negative Yeezy impact" and that revenue there dropped 16% last year.
• Its future prospects: Still, Adidas expects to almost double operating profit to about $550 million this year despite "macroeconomic challenges and geopolitical tensions." It plans to further scale up popular shoe lines like Samba that are seeing "extraordinary demand," launch new ones, and get a boost from major sports events like the Paris Olympics this summer.

(More Adidas stories.)