Adidas weighs writing off $320M unsold Yeezy inventory

Adidas is contemplating a potential write-off of its remaining Yeezy merchandise inventory, currently valued at $320 million.

The company, in its Wednesday earnings outlook, factored in a potential write-off of the remaining Yeezy inventory, influencing a reduced expected loss for the year to €100 million ($106.8 million) from an initial forecast of €450 million ($480.9 million).

The adjustment is attributed, in part, to the success of the earlier two Yeezy shoe releases.

What Bjorn Gulden said

  • “In Q4, we will continue to focus on our priorities and lay the foundation for an improving 2024 and a successful 2025 and 2026.
  • This year, we improved our outlook every quarter and are now looking at currency-neutral revenues to be down only low single digits (started the year with down high single digits) and a small operating loss of € 100 million, including a possible € 300 million($320m) write-off of the remaining Yeezy inventory and one-off costs of € 200 million related to the strategic review. We started the year with a negative outlook of an operating loss of € 700 million.”


Under the leadership of CEO Bjorn Gulden, who assumed control after the Yeezy partnership dissolution, strategic efforts are underway to mitigate the impact of losing the lucrative Yeezy business and navigate the path to recovery.

The move comes as the German footwear giant disassociates itself from the brand designed by Kanye West, who faced termination of his partnership with Adidas following a series of antisemitic remarks.

Gulden acknowledged that such a write-off scenario would be “financially the worst case,” as reported by the Associated Press.

While the company has already sold hundreds of millions of dollars worth of surplus Yeezy shoes, Gulden expressed hope for additional drops in the coming year to maximize value, potentially for charitable donations.

More Insights

The decision on the unsold Yeezy inventory’s fate remains pending, with Adidas having stored the merchandise in various locations.

The company factored in a possible write-off in its outlook for this year’s earnings, anticipating around $106 million in operating losses, a shift from its prior projection of a $481 million loss.

Adidas shares experienced a marginal decline of 2%, settling at $90.46, after the release of its third-quarter earnings report.

The report detailed a 6% increase in footwear revenue year-over-year, juxtaposed with a 6% decline in apparel sales, resulting in an overall 6% dip in revenue to $6.4 billion.

Noteworthy is the $374.7 million generated from Yeezy sales in the third quarter alone, contributing to a total of $1.28 billion for the entirety of the preceding year.

Adidas ended its collaboration with Kanye West in response to his antisemitic comments on social media, and earlier this year, it began selling off remaining Yeezy inventory, initially valued at $1.28 billion, with a commitment to donating a substantial portion of the proceeds to organizations combating racism and antisemitism.

The potential write-off could impact the brand’s valuation on Adidas’s financial statements.

Download Nairametrics App for breaking news and market intelligence.