Adidas plans to boost operating profit and clear Yeezy inventory
- Adidas plans to sell its remaining Yeezy inventory at cost
- Forecasting a near doubling of operating profit this year
- CEO highlights steady revenue despite Yeezy overhang
- Operating profit fell 60% in 2023
- Expecting stronger growth in the second half of the year
- Yeezy product contributed €300 million in operating profit in 2023
- Strategic review led to a one-off cost of €200 million
- Adidas shares fell 1% but have climbed 35% over the last 52 weeks
Sportswear maker Adidas announced its plan to sell its remaining Yeezy inventory at cost, as it anticipates a significant increase in operating profit this year. Despite the Yeezy overhang, the company’s revenue for 2023 remained steady, thanks to a conservative sell-in strategy. However, operating profit experienced a 60% decline to €268 million ($293 million) on a 5% revenue decrease to €21.43 billion. Adidas expects stronger growth in the second half of the year, with Yeezy product contributing around €300 million in operating profit in 2023. The strategic review resulted in a one-off cost of €200 million. Despite a 1% drop in Adidas shares, they have seen a 35% increase over the past 52 weeks.
Factuality Level: 3
Factuality Justification: The article provides relevant information about Adidas’ plans to sell its remaining Yeezy inventory at cost and its financial performance. However, it contains unnecessary details about the Yeezy collaboration with Kanye West and his controversial comments, which are tangential to the main topic. The article lacks depth in analyzing the impact of these factors on Adidas’ operations and financials.
Noise Level: 2
Noise Justification: The article provides relevant information about Adidas’ decision to sell its remaining Yeezy inventory at cost, the impact on its operating profit, and the strategic outlook for the company. It includes details on the financial figures, the collaboration with Kanye West, and analyst opinions. The article stays on topic and supports its claims with data and quotes. However, it lacks in-depth analysis, antifragility considerations, and accountability of powerful people.
Financial Relevance: Yes
Financial Markets Impacted: Adidas
Presence Of Extreme Event: No
Nature Of Extreme Event: No
Impact Rating Of The Extreme Event: No
Rating Justification: The article pertains to Adidas, a financial company, and discusses its plans to sell its remaining Yeezy inventory at cost. There is no mention of any extreme event.
Public Companies: Adidas (ADS)
Key People: Bjorn Gulden (CEO), Ye (Kanye West) (Rapper), Adam Cochrane (Analyst at Deutsche Bank)
Reported publicly:
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