Adidas cuts dividend after Kanye West split

Adidas is suffering the fallout from the company’s decision to part ways with rapper and fashion designer Kanye West.

Adidas cut ties with West, known as Ye, in October following the rapper’s anti-Semitic remarks and workplace complaints against him.

The sportswear maker will cut its dividend for 2022, warning that the company could suffer its first annual loss in three decades this year.

Chief Executive Bjorn Gulden vowed to rebuild the bruised brand after dealing with the fallout from ending the partnership.

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Analysts estimate that Yeezy accounted for as much as 7% of total sales in its prime.

The company will recommend a dividend of 0.70 euros ($0.7374) per share at an annual general meeting on May 11, up from 3.30 euros per share in 2021.

Adidas shares fell 1.7% in early European trading.

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Bjorn Gulden, CEO of Adidas. (REUTERS/Eduardo Munoz/Reuters Photos)

Shares are up about 40% since the company ended its deal with West.

Adidas said it is still deciding what to do with its inventory of unsold Yeezy shoes.

The split cost it $632 million in sales in the fourth quarter of 2022, and Yeezy shoes are estimated to have brought in $1.2 billion in revenue this year.

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Shrink wrapped limited edition Adidas AG ‘Yeezy’ model sneakers. (Photographer: Hollie Adams/Bloomberg via Getty Images/Getty Images)

If Adidas decides not to reuse the products, it will write off the inventory altogether, reducing profits by another $500 million. That, along with $200 million in one-time costs, would put Adidas at a loss of $700 million this year.

Reuters contributed to this report.