Adidas (ADSGn.DE) will inform investors on Friday about the unsold Yeezy sneakers that have plagued the German sportswear company since it parted ties with Kanye West over his anti-Semitic statements late last year.
A company-compiled average predicts a 4% drop in net sales to $5.07 billion in the first quarter, which executives will address on May 5.
Despite Adidas warning it could lose $700 million this year if it writes off the Yeezy shoes, the stock had gained 65% since Nov. 4, when the former Puma CEO was first floated as a successor to Kasper Rorsted.
In March, Gulden said Adidas had discussed the footwear with those who “have been hurt” by West’s antisemitic statements, but there are no quick solutions.
Since Adidas ceased making Yeezy sneakers, several versions have doubled in price on the resale market, but the firm has yet to determine what to do with its unsold stock.
Holly Huffnagle, U.S. Director for Combating Antisemitism at the American Jewish Committee, said Adidas should donate money if it sells the shoes.
“The challenge is if these shoes are going to be out there and worn by people, we must ensure that the antisemitic messaging of the shoes’ creator doesn’t spread,” she added.
Adidas hasn’t updated Gulden’s March claim that Yeezy sales may benefit nonprofits. An Adidas representative added, “We continue to evaluate options for the use of the existing Yeezy inventory,” but did not provide a deadline.
According to London expert Geoff Lowery, a payment to charity is the most likely conclusion, although the market would welcome a settlement.
Reuters said the New York-based Anti-Defamation League “stands ready and prepared to work with Adidas.” Adidas gave the organization over $1 million in November.
Adidas officials met with the AJC in December to review their antisemitic policy.
Adidas stated it “stands with the Jewish community in the fight against antisemitism and with all communities around the world facing injustice and discrimination.”
Adidas shareholders want the Yeezy crisis resolved and a brand overhaul.
“Being successful with Yeezy probably made Adidas lazy on finding other growth drivers,” said Paris-based Bryan Garnier nextgen consumer analyst Cedric Rossi.
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