LONDON (AP) — Adidas said Wednesday it has donated or plans to donate more than $150 million to groups fighting anti-Semitism and other forms of hate from sales of Yeezy shoes last year after cutting ties with Ye, the former rapper known as Kanye West.
The German sportswear brand had 1.2 billion euros ($1.3 billion) of popular Yeezy sneakers sitting in warehouses after ending its partnership with Ye in October 2022 over his anti-Semitic and other offensive comments on social media and in interviews.
Adidas has decided to sell some of the remaining shoes in batches, with two released last year and another released late last month, and donate a portion of the proceeds to anti-hate groups.
The company has donated to the Anti-Defamation League and the Philonise & Keeta Floyd Institute for Social Change, which is run by social justice advocate Philonise Floyd, the brother of George Floyd.
Net sales of what remains of Adidas' former athletic shoe line brought in about 750 million euros last year, compared to more than 1.2 billion euros in 2022, the company said.
Of the 300 million euros in profits it earned from sales of Yeezy shoes last year, the company said it had given or planned to donate more than 140 million euros (about $152 million).
Adidas said the decision to sell a large chunk of its Yeezy inventory and improved operations helped it make an operating profit of 268 million euros last year, a drop of nearly 60 percent from the year before. It blamed the high tax rate for ending the year with net losses of €58 million, a huge reversal from net income of €254 million in 2022.
“Although it wasn't good enough, 2023 ended better than I expected at the start of the year,” said chief executive Bjørn Gulden, who took over the top job last year.
Looking ahead, Adidas expects to make around €250 million from sales of the remaining Yeezy shoes this year.
However, the Herzogenaurach, Germany-based company points to North America as a persistent pain point, expecting revenue to fall in the mid-single digits this year and rise everywhere else. It said North America was “particularly affected by the negative impact of Yeezy” and that revenue there fell 16% last year.
Adidas expects to almost double operating profit to around €500m this year despite “macroeconomic challenges and geopolitical tensions”. It plans to further upgrade popular shoe ranges such as the Samba which are in “excellent demand”, launch new ones and get a boost from major sporting events such as the Paris Olympics this summer.
Adidas shares were up slightly in late morning trading.
