Adidas halves FY income outlook after Kanye West split

Adidas slashed its net income forecast for 2022 in half on Wednesday as it weighed the impact of its split from the rapper formerly known as Kanye West ahead of the key Christmas season.

The company now expects net income from continuing operations of around 250 million euros ($251.53 million) this year, down from a target of around 500 million euros set out in a statement on Oct. 20.

Adidas now expects currency-neutral revenues for the company to grow at a low-single-digit rate in 2022, down from a previously forecast mid-single-digit rate, and an operating margin of around 2.5% rather than 4%.

The new estimates reflect the high seasonality of the Yeezy business geared towards the fourth quarter, the company said.

Yeezy is the high-selling brand of the rapper now known as Ye, whose partnership with Adidas was axed on Oct. 25 after he made a series of antisemitic remarks.

On Wednesday, Adidas reported third-quarter net income from continuing operations of 66 million euros, revising down its preliminary figure by almost two-thirds following the end of the partnership.

Shares in Adidas fell by 2.1% in pre-market trade after the quarterly results announcement.