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Adidas faces a complex scenario with its shares taking a hit post the Kanye West fallout and conservative 2024 projections.
Adidas has witnessed another significant dip in its share prices following the fallout with hip-hop artist and mogul Kanye West, popularly known as ‘Ye’.
The company's shares slumped sharply after it revealed conservative projections for the year 2024, leaving investors and analysts disappointed.
This downturn adds to the challenges Adidas has been facing since severing ties with Kanye West in 2022, a move that has evidently impacted the finances of the multinational sportswear company.
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13:28 - 12.09.2023
Arsenal officially unveil new LFSTR jersey collection starring American rapper Pusha T and others
Arsenal and adidas have unveiled another stunning collaboration to once again highlight their football-inspired fashion style.
Conservative 2024 Projections trigger Share Price Plunge
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Adidas' preliminary full-year earnings report for 2023 showcased a net sales figure of $23.1 billion, reflecting a robust performance, as reported by Forbes.
However, the company's conservative projections for 2024 fell short of market expectations.
Analysts had anticipated an operating profit of approximately $1.37 billion USD (€1.27 billion), but Adidas projected a figure of only $540 million USD (€500 million) for the upcoming year.
This stark contrast in estimates led to a nearly 9% drop in Adidas' share price after European markets opened on Thursday, settling at $178.5 (165.44) – a 6% decline from the previous day.
According to reports, the company attributes the conservative forecast to currency fluctuations in key markets, signaling potential challenges ahead.
This announcement fueled concerns among investors, contributing to the ongoing fluctuation in Adidas' stock value.
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22:34 - 10.02.2023
Adidas blame split from Kanye West following massive dip in shares
Adidas has reportedly been left with $1.3 billion in unsellable Kanye West stock that it will have to write off as a loss after cutting its business ties with the disgraced rapper.
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17:05 - 27.02.2023
Report: Adidas and Kanye West reach $500 million deal to sell remaining Yeezys following massive dip in shares
Sportswear giants Adidas have reportedly reached a new mega-money agreement with Kanye West, following the termination of its partnership with Yeezy.
Adidas to sell leftover Yeezys
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In an effort to lessen the impact of the share price decline, Adidas has devised a strategic plan to sell its remaining inventory of Yeezy footwear.
The leftover Yeezys, valued at approximately $324 million USD (€300 million), will be offered at cost rather than being written off entirely.
Adidas anticipates generating around $270 million USD from this initiative, providing a financial buffer against the setbacks experienced due to the Kanye West fallout.
This move not only allows Adidas to recoup some of the potential losses but also presents an opportunity for consumers to acquire Yeezy footwear at a discounted rate.
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