Adidas AG (OTCQX:ADDYY) slashed its full-year guidance due to the impact of terminating its sportswear contract with Kanye West, known as Ye, and slower sales in China.
Last month, the sportswear giant cut ties with West and his Yeezy brand after the rapper made antisemitic comments.
For the full-year, Adidas said it now expects net income from operations to be around €250mln, down from the target of €500mln before the contract cancellation.
Furthermore, the German-listed outfit blamed a deterioration of traffic trends in China, more reductions to reduce inventory levels and one-off costs of around €500mln as other factors behind the slashed guidance.
However, the group remains “encouraged by the enthusiasm for the upcoming FIFA World Cup which is already noticeable in our football revenue growth,” said chief financial officer Harm Ohlmeyer.
Despite cutting guidance, currency neutral revenues grew 4% in the third quarter, with double digit e-commerce growth in EMEA, North America and Latin America.
Shares in Adidas rose 2% to €122.
Much of this movement may be on the back of the news that Adidas is appointing former Puma CEO Bjørn Gulden to take over from outgoing boss Kasper Rorsted in the new year.
Gulden had success in turning around its German rival, having previously led apparel and accessories at Adidas in the 1990s.