In its newly-issued full-year financial report for 2023, adidas announced that its revenue and operating profit surpassed expectations in the fourth quarter, thanks to its decision not to write off the majority of its remaining YEEZY inventory.
The brand’s currency-neutral revenues reached €268 million EUR, which is €368 million EUR higher than what the company had anticipated: an operation loss of €100 million EUR. “The improvement is due to the better operating business of around €100 million EUR and the decision to not write off €268 million EUR of YEEZY inventory,” said adidas CEO Bjørn Gulden.
After firmly denying any possibility that the German sportswear brand would sell its YEEZY products in August of last year, Gulden has changed his outlook, stating that adidas will sell its remaining inventory in 2024 for “at least the cost price.” He added, “This is why we have only written off inventory that was either damaged or very broken in sizes.”
The company expects its currency-neutral sales to climb at a “mid-single-digit rate” over the course of this year, with the expectation that sales from YEEZY products would generate roughly €250 million EUR. As adidas plans to sell the leftover YEEZY products at cost, the revenue generated by that inventory will not have an effect on the company’s operating profit for 2024.
This year, the brand expects to see an operation profit of €500 million EUR, despite “no assumed profit contribution from Yeezy, the strong unfavorable currency effects, the ongoing challenges in North America, our continued investment in both marketing and sales and a world full of uncertainties.”
See adidas’ full financial report for 2023 here.