By Anna Cooban, CNN
London (CNN) — Adidas upgraded its earnings outlook for the year Thursday, in part because of demand for the company’s remaining stock of its discontinued Yeezy merchandise.
Adidas (ADDDF) now expects to make a €450 million ($491 million) operating loss in 2023, a much better outcome than the €700 million ($764 million) loss it had forecast back in March. The company said sales would also fall by less than originally expected.
The company said the improved revenue expectations reflected “the positive impact of the first sale of some of its Yeezy inventory, and a slightly-better-than expected development of the … business in the first half of the year.”
The German sportswear company was left with a huge inventory of Yeezy shoes after it terminated its partnership with Ye, the rapper formerly known as Kanye West, in October over his offensive and antisemitic remarks.
The first sale of the Yeezy merchandise brought in €400 million ($437 million) during the second quarter. Last week, Adidas said it would put another batch of its Yeezy inventory up for sale during August.
CEO Bjørn Gulden said Thursday that Adidas had sold between 20% and 25% of its stock of Yeezy shoes, according to Reuters.
Adidas said its 2023 outlook does not include the second Yeezy release.
The company said in May it would donate a significant amount of the sale proceeds to organizations working to combat discrimination and hate, including racism and antisemitism.
Adidas also saw strong growth in China, with revenues up 16% during the second quarter. But challenges in the global economy would continue to weigh on the company’s outlook, it said.
“Elevated recession risks in North America and Europe as well as uncertainty around the recovery in Greater China continue to exist,” Adidas said.
Shares in the company rose 1.1% following the results announcement. The stock has soared 42% since the start of the year as investors pin their hopes on Gulden — who became CEO on January 1 — to revive the company.
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