'Divorce' from Kanye West affects Adidas earnings

Dissolution of the partnership with the American rapper Kanye West in October last year came at a high price for Adidas. The company estimates lost revenues of EUR 1,2 billionif they failed to sell the remaining inventory. West is more popular than Messi and the World Cup because the Adidas sponsorship is not generating the desired sales to make up for the loss of the partnership breakup.

2023 is the year of transformation

Adidas issued its fourth profit warning in less than six months. The company is looking for drastic changes under the leadership of a new CEO, Bjorn Gulden. He stated that 2023 is a year of transformation and uncertainty among the high recession risk in Europe and North America and the slow Chinese recovery.

Last month, the company surprised investors by releasing preliminary results for 2022, triggering the stock's decline and closing down nearly 11 percent. lower. Today's update does not provide reassuring grounds, but encourages investors to be confident and, above all, be patient. Dividends for the full year were cut by 79 percent.

It seems that decisions based on ethics and morality still remain secondary to markets, and the company can only adapt or leave in order to remain competitive and sustainable in the long term.

By Gabriel Debach, Market Analyst at eToro