Adidas noticed working earnings dwindle within the first three months of the 12 months because the German sportswear firm’s break-up with the rapper previously referred to as Kanye West and his well-liked Yeezy shoe model value it 400 million euro (£351 million) in misplaced gross sales.

Profit was right down to 60 million euro (£52 million) from 437 million euro (£383.7 million) in the identical quarter a 12 months in the past, whereas the agency’s revenue margin shrank to a naked 1.1%.

Net gross sales declined 1%, to five.27 billion euro (£4.6 billion), and would have risen 9% with the Yeezy line, the corporate mentioned on Friday.

Losing the Yeezy model is “of course hurting us”, new CEO Bjorn Gulden mentioned in a press release, which didn’t clarify what Adidas would do with 1.2 billion euro (£1.05 billion) price of unsold Yeezy sneakers after the corporate reduce ties with the rapper now referred to as Ye in October.

Adidas is “getting closer and closer to making a decision” on what do to with the sneakers and “options are narrowing,” Mr Gulden mentioned Friday – however with “so many interested parties” concerned within the discussions, no choice had but been reached, he mentioned.

An working lack of 700 million euro (£614 million) is feasible this 12 months, Adidas mentioned, largely because of the 500 million-euro hit it might take if it doesn’t promote the prevailing Yeezy sneakers.

The break-up, which adopted Ye’s antisemitic feedback on social media and in interviews, will scale back earnings by 500 million euro (£439 million) within the coming 12 months, the Herzogenaurach-based firm has mentioned.

Mr Gulden did say the outcomes for the Herzogenaurach-based firm had been “a little better than we had expected” as the corporate seeks to restart development and transfer past the break-up with Ye.

The firm additionally faces different issues tied to Ye. Investors sued Adidas every week in the past within the US, alleging the corporate knew about Ye’s offensive remarks and dangerous behaviour years earlier than the break up, and didn’t take precautionary measures to restrict monetary losses.

The lawsuit – representing individuals who purchased Adidas securities between May 3 2018, and February 21 2023 — pointed to 2018 feedback the place Ye instructed slavery was a “choice”, and stories of Ye making antisemitic statements in entrance of Adidas employees.

The firm mentioned final week that it rejected “these unfounded claims and will take all necessary measures to vigorously defend ourselves against them”.

Ending the Ye partnership additionally value Adidas 600 million euro (£526.9 million) in misplaced gross sales within the final three months of 2022, serving to drive the corporate to a internet lack of 513 million euro (£450.5 million).