Adidas anticipates a €700m operating profit in 2024 after parting ways with Kanye West. The brand, known for iconic shoes like Samba, Gazelle, and Campus, is poised for success.
The Samba, Gazelle and Campus shoe maker expects to make €700m (£598m) operating profits in 2024.
In February, the German sportswear giant announced its intention to sell its remaining Yeezy trainers, a product of its partnership with West, at minimum cost price.
Tuesday’s positive remarks from Adidas follow a month after the company reported its first losses in three decades.
Adidas is renowned for producing Samba, Gazelle, and Campus shoes.
The company revealed that its adjusted figures exceeded initial predictions by €200m, attributed to a stronger-than-expected first quarter performance.
Adidas reported a quarterly operating profit of €336m, a significant increase from €60m the previous year, which was impacted by its split from West.
Additionally, Adidas disclosed that it generated €150m in sales from Yeezy products during the quarter, resulting in a profit of approximately €50m.
It was stated that the remaining Yeezy inventory, valued at approximately €200 million, would likely be sold later this year, with no additional profit expected. Previously, it committed to allocating a portion of the sales revenue to charitable organizations dedicated to combating hate.
In November 2022, Adidas severed its relationship with West following his antisemitic remarks on social media. Nevertheless, the company continues to maintain a broad and varied fan base, including affluent and influential customers.
Adidas and its Samba line grabbed attention last week when it surfaced that British Prime Minister Rishi Sunak had been a customer for “many, many years.” Aware that his typically serious image might not align with other Samba enthusiasts, Mr. Sunak offered a comprehensive apology on LBC radio, affirming his longstanding loyalty to the Adidas brand.
However, amidst concerns that the Yeezy incident would impact profits, the global company also highlighted the devaluation of the Argentine peso at the close of 2023.
For decades, Adidas has been the manufacturer of jerseys for Argentina’s national football team. Puma, a competing sportswear company, has also disclosed that the devaluation of Argentina’s currency has adversely affected its financial performance, given that the region represents its largest and most rapidly expanding market.
In fact, they’re already making moves to solidify their position in the sneaker industry. With the end of the Yeezy collaboration, Adidas is shifting focus to other partnerships and new product lines, creating a buzz among fans and industry insiders alike. It’ll be interesting to see what’s next for Adidas without the Yeezy brand, but one thing’s for sure – they’re not slowing down anytime soon. Stay tuned for updates and let’s see what’s in store for the future!
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