Adidas Dilemma: What to Do With $1.3 Billion of Yeezy Gear

Adidas reported its first annual loss in over 30 years, largely due to the discontinuation of the Yeezy product line. The company's revenue increased by 6%, with significant growth in Latin America and North America. However, challenges in Russia and a decline in China's revenue due to COVID-19 and local competition affected overall performance. Looking ahead, Adidas anticipates a revenue decline due to geopolitical and macroeconomic tensions. The Yeezy inventory remains a significant issue, with $1.3 billion worth of unsold sneakers. Analysts estimate a €500 million hit to operating profit, highlighting the impact on Adidas' financials.

What was the main reason for Adidas's first annual loss in over 30 years?

• Decline in North American sales

• Increased competition from Nike

• Dropping the Yeezy product line

• High production costs

Which region showed the highest revenue growth for Adidas?

• Latin America

• North America

• EMEA

• Asia Pacific

What was a significant factor in the decline of Adidas's revenue in China?

• Currency fluctuations

• Supply chain disruptions

• COVID-19 and local competition

• Increased tariffs

What is the expected revenue trend for Adidas in 2023?

• Stable revenue

• High single-digit percentage decline

• Moderate increase

• Significant growth

How much is the unsold Yeezy inventory worth?

• $500 million

• $750 million

• $1.3 billion

• $2 billion