adidas Q2 Sales Down, As Canceled Yeezy Collaboration Continues To Affect Performance

During a digital press conference in Germany on Thursday morning, adidas presented its second-quarter financial results, reporting a decline in sales largely due to its canceled collaboration with Yeezy.

With currencies adjusted, the sportswear label earned €5.34 billion EUR in Q2, down from the €5.6 billion EUR that the company reported during the same period last year. The figure brought adidas’ total revenues for the first half of 2023 to €10.62 billion EUR.

Per adidas’ chief executive officer, Bjørn Gulden, these results are not a surprise. “We are happy with the way the second quarter developed. 2023 is not about trying to show short-term results,” he said in a statement. He added that he did not expect the company to return to “good and profitable” until 2025.

Notably, Yeezy sales only attributed to 1% of adidas’ growth in the second quarter. The company canceled its collaboration with Ye after he made a slew of “hateful and dangerous” comments in October of last year. The partnership’s ending caused adidas’ sales to fall considerably, with analysts suggesting the collaboration could have made adidas up to €1.5 billion EUR.

“We have inherited a situation that was very unfortunate,” Gulden said in a statement. “I think the Yeezy business and the [Nike] Jordan business were the only two collabs in the world that were creating these kind of premiums over a longer period. Our task now is to limit the damage, get rid of the inventory, use the proceeds for good and lead the business without Yeezy.”

The company ultimately opted to sell its remaining Yeezy products in May of this year, donating a percentage of proceeds to organizations battling anti-Semitism. The majority of the drop sold at full price, raking in an additional €400 million EUR in the second quarter.

In light of the additional sales, adidas’ full-year expectations shifted. Before, the company expected an operation loss of approximately €700 million EUR; now, that figure has dropped to roughly €450 million EUR. The outcome will depend on the success of its second Yeezy drop, which kicked off on August 2 and includes 10 different models.

As expected, adidas saw a decline in North America, with sales down 16% to €1.4 billion EUR in Q2 of 2023. If the Yeezy sale had not happened, that figure would have been down 20%. adidas was also affected by discounting, like its competitors, which was in part due to both surplus and insufficient supply. Per Gulden, the company looks to see positive growth in North America in the second half of 2024.

In Latin America and Asia Pacific, however, adidas earned increases in sales of 30% and 7%, respectively. The company also reported a 16% increase in sales in Greater China, where adidas plans to invest further in performance sports.

See adidas’ full Q2 2023 financial report here.

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