Adidas beats forecasts, but Yeezy headache lingers
STORY: Adidas shares jumped 7% in early trades on Friday (May 5).
The German sportswear giant surprised markets with better-than-expected earnings.
It eked out a profit of $66 million over the latest quarter, or about four times what analysts had forecast.
Sales dropped over the period, but much less than expected.
Latin America was the big bright spot, with sales there up by almost a half.
One big headache lingers on though.
Adidas still can’t figure out what to do with its big pile of unsold Yeezy sneakers.
It developed the brand with rapper Kanye West, but then severed all ties last year after he made antisemitic remarks.
The firm has since warned that simply writing off the stock would mean a loss of 700 million euros, or about $770 million.
Deutsche Bank analysts said it was disappointing that Adidas still hadn’t come up with a plan.
The loss of the Yeezy line cost it sales of over $440 million over the period.
It also hit profitability, cutting into margins.
China remained another weak spot, with sales there down 9%.