Why Adidas Chose to Sell Its Remaining Yeezy Inventory Instead of Writing It Off

When Adidas ended its partnership with Ye, formerly known as Kanye West, in October 2022, the company inherited a problem that was commercial, financial and reputational at once. It had Yeezy products in warehouses, a brand relationship it had terminated, and no obvious way to dispose of the stock without creating another problem.

Destroying the shoes would have raised waste and sustainability concerns. Selling them risked keeping a controversial product in circulation and potentially directing royalties to Ye. Reworking the products or removing their branding was not an attractive solution either. The inventory had value, but every route to realizing that value carried a cost.

Bjørn Gulden became Adidas chief executive on January 1, 2023, after the partnership had already ended. He inherited the decision rather than making the original break. What followed was a test of how a company can manage stranded inventory when the product still has demand but the brand relationship behind it has become untenable.

Adidas ultimately chose a staged sale, with proceeds supporting organizations working against discrimination and hate. It then decided not to write off most of the stock still on hand at the end of 2023, because its research suggested the remaining products could be sold at least at cost. The sales generated roughly €750 million in 2023 and another €650 million in 2024. Adidas said it held no Yeezy inventory at December 31, 2024.

Those figures explain the financial logic. They do not settle every question about the choice.

The starting point: a costly problem with no clean exit

In its February 9, 2023 outlook, Adidas said that selling none of the existing Yeezy inventory would reduce 2023 revenue by around €1.2 billion and operating profit by about €500 million. The company expected underlying operating profit to be around break-even. If Adidas decided not to repurpose any of the stock, a further €500 million write-off would hit operating profit. Along with up to €200 million in one-off costs, that was the basis for the company’s widely reported worst-case operating loss of €700 million.

The €700 million figure was not a prediction that Adidas would necessarily lose that amount. It was a scenario built around specific assumptions: no sale of Yeezy stock, a write-off of inventory, and additional one-off expenses. That distinction matters because the eventual result was often described as if the company had simply avoided a loss by selling shoes. In reality, Adidas faced several moving parts, including its wider business performance, foreign-exchange pressure, restructuring costs and the accounting treatment of the remaining inventory.

The stock also was not equivalent to cash sitting in a bank account. Inventory can be valuable only if customers will buy it at a price that covers its relevant costs. A decision to sell needed evidence of demand, a plan for how to distribute the product, and a judgment about whether the financial benefit outweighed the reputational and operational complications.

At the time, Gulden did not present the problem as an easy liquidation. In public comments reported by the Associated Press in March 2023, he described the many variables involved and acknowledged that selling the products could mean paying royalties to Ye. He also said destroying the shoes could create sustainability issues and that disguising the products to sell them without their original branding was not an honest solution.

A staged sale rather than a one-time clearance

On May 19, 2023, Adidas announced that it would begin selling some of the remaining Yeezy products. It said it would donate a significant portion of the proceeds to selected organizations working to combat discrimination and hate, including racism and antisemitism. The company identified organizations including the Anti-Defamation League and the Philonise & Keeta Floyd Institute for Social Change among the beneficiaries.

The plan did not make the underlying controversy disappear. It did, however, create a route to recover value without pretending the products were ordinary leftover stock. Adidas could sell in controlled releases, observe customer response, and adjust the timing and quantity of later drops. It could also direct money toward groups whose work addressed some of the harm associated with the controversy.

The first release in May and June drew strong demand. Euronews reported that the initial batch sold out. Adidas said the first 2023 drops generated around €400 million in revenue and contributed about €150 million to operating profit in the second quarter. The company then released more product in August. Across 2023, the sales of Yeezy products brought in around €750 million in revenue and contributed approximately €300 million to operating profit.

That contribution was meaningful in a year when Adidas’s operating profit was under pressure. It was not the whole story. Adidas’s operating profit for 2023 was €268 million, compared with €669 million in 2022. The company’s own reporting said the better-than-expected outcome reflected both improved operational performance and the decision to sell a significant portion of Yeezy stock while writing off only a small part of what remained.

The distinction between revenue and operating profit is important. The €750 million was revenue from sales, not profit. The approximately €300 million figure was the reported operating-profit contribution from those sales. And neither number, on its own, measures the full reputational cost or the value of the charitable commitments.

Why the sales stopped for the rest of 2023

Adidas did not release further Yeezy drops in the final months of 2023. The pause attracted speculation, especially after the outbreak of the Israel-Hamas war, but the company did not publicly confirm that the conflict was the reason. It is therefore safer to describe the pause as a documented decision with an incompletely disclosed rationale, rather than assign it a motive the company did not establish.

The pause matters because the staged plan was not simply a conveyor belt for clearing stock. Adidas had to consider the product’s demand alongside the public context in which each release would take place. The brand’s association with the controversy had not gone away, and each new sale could renew attention to it.

There is a limit to what can be concluded from the public record. The company’s decision not to release more products during the rest of 2023 is clear; the precise internal weighting of reputational, commercial and geopolitical considerations is not. Treating one outside explanation as established fact would make the story sound more certain than the evidence allows.

The accounting decision that changed the outlook

On January 31, 2024, Adidas announced that it had decided not to write off most of its remaining Yeezy inventory. The company said consumer, retail and trade research indicated that it could sell the remaining stock in 2024 for at least its cost price. It had written off only a low-double-digit million-euro amount of Yeezy inventory, largely stock that was damaged or in very broken size runs.

That was a material change from the risk scenario outlined at the start of 2023. It also requires careful wording. Adidas did not say that every remaining item was guaranteed to sell at a profit. Its stated expectation was that the stock could be sold at least at cost. Nor did that guidance establish a precise balance-sheet carrying value for all remaining inventory. It established the company’s expectation about the price it could recover through the planned sales.

The decision helped Adidas report 2023 operating profit of €268 million, about €368 million better than its latest guidance. In explaining the difference, the company pointed to approximately €100 million of better-than-expected performance in its underlying business and the decision not to write off around €268 million of Yeezy inventory that might otherwise have been impaired. This was not a simple accounting trick: if the company had evidence that the stock could be sold for at least cost, writing it down as if it had no recoverable value would have overstated the expected loss. But the judgment depended on forecasts about future sales and the quality of the evidence behind them.

Adidas’s 2024 guidance assumed that the remaining Yeezy stock would generate about €250 million in revenue, at cost, with no operating-profit contribution. That was a forecast, not a statement that the inventory’s carrying value was exactly €250 million. The company ultimately sold around €650 million of Yeezy products in 2024, far above that initial revenue assumption, and reported an operating-profit contribution of around €200 million for the year.

The financial result—and what it does not prove

Across 2023 and 2024, Adidas generated roughly €1.4 billion in revenue from Yeezy sales. The company reported around €750 million in 2023 and around €650 million in 2024. By the end of 2024, it said all remaining Yeezy inventory had been sold.

Those numbers support the conclusion that Adidas recovered substantial value from stock that might otherwise have been written off or destroyed. They do not prove that selling the products was the only reasonable option, or that the approach carried no long-term cost. The alternatives were difficult to compare: destruction would have created its own financial and environmental questions, while a sale risked renewed criticism and continued visibility for a brand relationship Adidas had ended.

The broader company results also need to be kept separate from Yeezy. Adidas’s underlying business, excluding Yeezy sales in both years, grew 13% on a currency-neutral basis in 2024, according to the company’s annual report. In 2025, Adidas reported record revenue of €24.8 billion and operating profit of approximately €2.06 billion, with no Yeezy contribution. Those later results should not be credited to the Yeezy inventory decision. They reflect the wider Adidas business, its products, markets, costs and commercial execution.

Donations: commitment is not the same as cash transferred

Adidas linked the sales to donations for organizations fighting discrimination and hate. The company’s reporting said it had incurred more than €140 million in extraordinary expenses in 2023 for donations and accruals for further donations, alongside around €200 million in one-off costs from its strategic review. Earlier reporting said Adidas had donated €10 million and set aside another €100 million for future donations at that stage. In 2024, the company recorded further provisions for donations, in an amount similar to the roughly €100 million release associated with the Yeezy settlement.

These disclosures should not be flattened into a single number described as money already donated. A donation paid, a commitment to donate and an accounting provision for a future donation are different things. The published figures show the scale of Adidas’s stated financial response, but they do not mean every euro discussed in a commitment had already reached a recipient at the date of the report.

That distinction is not a technicality. The charitable purpose was part of the rationale Adidas offered for selling the products. The credibility of that rationale depends on transparency about recipients, amounts and timing, as well as the company’s ability to distinguish actual transfers from future obligations.

What leaders can learn from the Yeezy exit

The first lesson is to separate the decision to end a relationship from the decision about the assets it leaves behind. Ending the partnership was a response to the conduct and controversy surrounding Ye. The inventory question was different: Adidas still owned products that customers wanted, and the company needed to decide whether any value could be recovered without undermining the reasons for ending the relationship.

The second lesson is that a staged plan can preserve options. Adidas tested demand through limited releases, observed the results and retained the ability to pause. The approach did not eliminate reputational risk, but it avoided an irreversible decision about the entire stock before the company had evidence about the market and the practicalities of selling it.

Third, accounting judgments should follow evidence, not the desire to improve a headline result. Adidas’s decision not to write off most of the remaining stock rested on research suggesting that the products could be sold at least at cost. That is a more defensible rationale than simply preferring a better profit number. It also remains a judgment: the value of inventory depends on what a company can reasonably expect to recover, not on the original price tag or the public relations value of keeping it on the books.

Fourth, the company needed to be precise about what its numbers meant. Revenue is not profit; a provision is not a donation already paid; a forecast is not an actual result; and a plausible explanation for a pause is not a confirmed reason. In a story this sensitive, loose wording can make a sound commercial analysis look like advocacy.

Finally, recovering value is not the same as resolving a reputational problem. Adidas sold the remaining inventory and directed substantial sums toward anti-hate organizations, but the controversy that led to the partnership’s termination cannot be measured solely through the revenue recovered or the stock left in warehouses. The financial decision can be evaluated; the broader judgment about the brand and its responsibilities remains more complicated.

Adidas’s Yeezy exit was neither a clean win nor a simple failure. It was a controlled attempt to recover value from a compromised asset, using staged releases, evidence about demand and a willingness to pause. The results were substantial: about €1.4 billion in revenue over two years, with no Yeezy inventory remaining at the end of 2024. The harder measure is whether the company’s financial discipline and its commitments to those affected by the controversy were as transparent and durable as the sales figures.