Adidas to slash dividend after Kanye West split
Adidas will recommend cutting its dividend to 0.70 euros ($0.7374) per share down from 3.30 euros a share at its May annual meeting
Adidas is suffering some fallout from the company's decision to split with rapper and fashion designer Kanye West.
Adidas cut ties with West, known as Ye, in October following antisemitic comments by the rapper and workplace complaints against him.
The sporstwear maker will slash its 2022 dividend, warning the company could suffer its first annual loss in three decades this year.
Chief Executive Bjorn Gulden pledged to rebuild the bruised brand after dealing with the fallout from ending the partnership.
ADIDAS WARNS OF LOSSES IN AFTERMATH OF YEEZY FALLOUT
A split photo of the Adidas logo on a sign and Kanye West. (REUTERS/Andrew Kelly/File Photo/Steve Eichner/WWD/Penske Media via Getty Images / Reuters Photos)
Analysts estimate Yeezy accounted for as much as 7% of total sales in its best years.
The company will recommend a dividend of 0.70 euros ($0.7374) per share, down from 3.30 euros a share in 2021, at a May 11 annual general meeting.
Adidas shares fell 1.7%in early European trading.
ADIDAS ENDS PARTNERSHIP WITH KANYE WEST OVER ANTISEMITIC COMMENTS
Bjorn Gulden, chief executive officer of Adidas. (REUTERS/Eduardo Munoz / Reuters Photos)
The shares have gained around 40% since the company ended its deal with West.
Adidas said it is still deciding what to do with its stock of unsold Yeezy footwear.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| ADDYY | ADIDAS AG | 121.15 | +3.31 | +2.81% |
The split cost it $632 million in sales in the fourth quarter of 2022, and Yeezy shoes would have brought in an estimated $1.2 billion in revenue this year.
YE BOOTED FROM SKECHERS CORPORATE OFFICE AFTER SHOWING UP 'UNANNOUNCED AND UNINVITED'
Shrink-wrapped limited edition Adidas AG 'Yeezy' model trainers. (Photographer: Hollie Adams/Bloomberg via Getty Images / Getty Images)
If Adidas decides not to repurpose the products, it will write the inventory off altogether, denting profit by another $500 million. That, along with $200 million of one-off costs, would bring Adidas to a $700 million loss this year.
Reuters contributed to this report.