Lower sales due to high inflation, production problems in China and the canceled partnership with Kanye “Ye” West: Adidas lowers its operating margin forecast from 4 to 2.5 percent. Especially in the important Christmas business, West’s “Yeezy” collection is missing from the shelves.
The sporting goods and clothing manufacturer Adidas has surprisingly lowered its sales and margin forecast again because of the terminated partnership with the controversial US rapper Kanye “Ye” West.
Since the business with the musician’s products (“Yeezy”) will cease in the fourth quarter and this is traditionally particularly strong at the end of the year, Adidas now only expects sales adjusted for currency effects to be in the low single-digit percentage range. The operating margin is now only expected at 2.5 percent, said the company listed on the DAX. Most recently, the group had forecast growth in the mid-single-digit percentage range and a margin of 4.0 percent.
On October 20, Adidas had once again lowered its sales and margin forecasts, mainly because of the problems in China and the reluctance to buy as a result of high inflation, and thus sent the share plummeting. A few days later, the company had to end its partnership with Kanye “Ye” West, among other things because of anti-Semitic statements by the US rapper.
At that time, Adidas had already announced that this step would burden earnings by around 250 million euros and that the forecast for the surplus from continuing operations would have to be further reduced. The company, which is facing a change at the top of the group, is now assuming profit from continuing operations of EUR 250 million in the current year instead of EUR 500 million as expected in mid-October.
