In March, Adidas reported that it was expecting an operating loss of $728 million. However, on May 5, the firm reported an increase of 8% in shares, marking its highest level since August 2022.
The growth comes after sales were predicted to drop by 4% but only dropped by 1%, Reuters reported.
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 the gains made by Adidas, the BBC is also reporting that the company’s sales in North America had decreased by 20% due to cutting ties with Kanye West. CEO Bjørn Gulden admits that cutting ties with Kanye West is “hurting us.”
In 2022, Adidas cut ties with the rapper, now known as Ye, for making a series of antisemitic comments.
“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 parties recorded financial losses – Adidas lost $540 million in its final 2022 quarter due to West’s unsold Yeezy products. Ye, on the other hand, dropped from his billionaire status – his net worth dropped to $400 million from $1.5 billion.
His deal with Adidas accounted for $1.5 billion of his net worth. “With that gone, Ye is no longer a billionaire,” Forbes wrote when the deal was canceled. “It caps a stunning, self-induced downfall for one of the brashest and most volatile personalities to have graced Forbes’ pages.”
According to Forbes’ latest calculation of his net worth, West, who now goes by the name Ye, saw his net worth surge by $2 million within a month. His fortune moved from $398 million on March 23 to $400 million as of April 19, 2023. He had experienced a temporary dip of $2 million in his fortune, Billionaires Africa reported.
Currently, his net worth is estimated at $400 million, as per Forbes estimates, and includes his real estate holdings, cash, a music catalog, and a five-percent stake in Skims, the shapewear company founded by his ex-wife Kim Kardashian.