Adidas announced on Wednesday that it has given more than $150 million to organizations combatting antisemitism and other forms of hate, using the proceeds from the sales of Yeezy shoes following its split with Ye, the artist previously known as Kanye West.
The sportswear brand from Germany had 1.2 billion euros ($1.3 billion) worth of popular Yeezy sneakers stored in warehouses after ending its collaboration with Ye in October 2022 due to his offensive comments on social media and in interviews, including those that were antisemitic.
Adidas chose to sell some of the remaining shoes in batches, with two releases last year and another in late last month, and will donate a portion of the profits to anti-hate groups.
The company has made donations to the Anti-Defamation League and the Philonise & Keeta Floyd Institute for Social Change, led by social justice advocate Philonise Floyd, the brother of George Floyd.
Net sales of Adidas' former line of Yeezy sneakers brought in about 750 million euros last year, compared to over 1.2 billion euros in 2022, the company reported.
The company reported a profit of 300 million euros from the sales of Yeezy shoes last year and has donated or plans to donate over 140 million euros (about $152 million).
Adidas attributed their 60% decrease in operating profit from the previous year to selling a large portion of their Yeezy inventory and improved operations. They ended the year with a net loss of 58 million euros, a significant change from a net income of 254 million euros in 2022, due to a high tax rate.
CEO Bjørn Gulden, who took over last year, stated, "Despite not meeting expectations, 2023 ended better than anticipated at the beginning of the year."
Adidas anticipates earning around 250 million euros in sales of the remaining Yeezy shoes this year.
However, the company based in Herzogenaurach, Germany, foresees a decline in revenue in North America by a mid-single digit percentage this year, while expecting growth elsewhere. They noted that North America experienced a 16% drop in revenue last year, particularly impacted by the negative influence of Yeezy.
Adidas projects a nearly 500 million euros operating profit this year, aiming to expand successful shoe lines such as Samba that are experiencing high demand, introduce new lines, and benefit from major sports events like the Paris Olympics this summer, despite facing challenges from economic and geopolitical issues.
Adidas shares showed a slight increase in late morning trading.
