Adidas announced in March that it expected an operational loss of $728 million. However, on May 5, the company announced an 8% gain in shares, the biggest level since August 2022. The increase comes after sales were expected to fall by 4% but instead fell by 1%, according to Reuters.
Equity research analyst at Quilter Cheviot, Mamta Valechha, told Reuters that Adidas is managing the expectations of investors. “They are going in the right direction – China is recovering, inventories are still too high, but at least sequentially down,” she said.
Despite Adidas’ improvements, the BBC reports that the company’s sales in North America have dropped by 20% as a result of its breakup with Kanye West. Bjrn Gulden, CEO of Adidas, says that severing ties with Kanye West is “hurting us.”
Adidas severed ties with the rapper, now known as Ye, in 2022 after he made a series of antisemitic remarks.
“Adidas does not tolerate antisemitism and any other sort of hate speech,” the company said in a statement. “Ye’s recent comments and actions have been unacceptable, hateful, and dangerous, and they violate the company’s values of diversity and inclusion, mutual respect, and fairness.”
Both sides suffered financial losses, with Adidas losing $540 million in the last quarter of 2022 as a result of West’s unsold Yeezy items. Ye, on the other hand, has lost his billionaire title, with his net worth falling from $1.3 billion to $400 million.