Adidas AG generated about €400 million ($437 million) in sales from Yeezy shoes in the second quarter, as consumer demand remained high despite a furore over the antisemitic views of the rapper behind the discontinued collaboration.
Revenue from Yeezy was roughly in line with the same period last year, prior to the fallout. Adidas scrapped its Yeezy partnership with rapper and designer Ye, formerly known as Kanye West, in October after he made a series of antisemitic remarks, leaving about €1.2 billion worth of sneakers in limbo.
Shares were up about 1.3% in early Frankfurt trading.
Still, sales of the stockpiles have already helped the German sports giant increase its financial targets for the year, and could sweeten the picture as Adidas sells off more of its Yeezy inventory, the company said in a statement Thursday. The second batch sale began this week.
Adidas has pledged to donate a significant amount of Yeezy proceeds to organizations working to combat discrimination and hate.
New Chief Executive Officer Bjorn Gulden is trying to create an era of hot-selling sneakers and apparel at Adidas, which has been beset by several crises in recent years.
Excluding Yeezy, Gulden said that Adidas’s business has performed “slightly better than expected” and that he expects the brand to gain more buzz when larger volumes of classic sneakers like the Samba and Gazelle hit stores.
The company is still facing significant challenges. There’s an elevated risk of recession in North America and Europe, where sales fell in the second-quarter. Meanwhile, it’s unclear how strong of a rebound is taking shape in China, where sales grew 16% in the quarter after two years of plunging demand.
Retailers are being “very cautious” with their early orders because of the persistently high inventory levels of sneakers and apparel in the market, Gulden said.
Against that backdrop, Gulden is treating 2023 as a rebuilding year, aiming for improvement in 2024 and a “good and profitable Adidas” in 2025 and beyond, he said.