Adidas cuts results forecasts for 2022 after end of collaboration with rapper Kanye West | ECONOMY

German sports equipment maker Adidas slashed its 2022 earnings forecast again on Wednesday after ending its juicy collaboration with boisterous rapper Kanye West at the end of October.

As a result, the group expects to post an annual net result of about $250 million versus the $500 million expected in its last October forecast, which had already been reduced against the background of COVID-related revenue losses in China. -19.

Global turnover is expected to only increase between 0.01% and 5%.

Nonetheless, Adidas is counting on a $400 million boost from sales of soccer jerseys and other soccer cleats thanks to the World Cup in Qatar, which begins in November.

Norwegian Bjørn Gulden, boss of rival company Puma, was appointed on Tuesday to lead the group from 2023. The list of challenges that await him in dealing with the lackluster performance of the three-cushion brand is already long.

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The loss of revenue due to the breakup of the partnership with Kanye West alone is estimated at $500 million by the end of 2022.

The Herzogenaurach group announced on October 25 that it had cut ties with the billionaire musician following certain anti-Semitic remarks.

The collaboration between Adidas and the American star, started in 2014, was for a long time one of the most successful in the fashion world and this is immediately reflected in the group’s adjusted forecasts.

Gross margin, one of its key indicators, should now stand at 47% in 2022 from 47.5% previously.

The operating result should represent 2.5% of sales, compared to 4% expected at the end of October.

Source: AFP