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Adidas has said the ending of its collaboration with Kanye West is “hurting” the business, with sales in North America hard hit.
The sportswear giant cut its ties with with the designer and rapper, known as Ye, late last year after he posted anti-Semitic comments on social media.
West designed trainers under the Yeezy brand and Adidas said the loss of the business cut sales by €400m (£350m) in the first quarter of the year.
Overall, total revenue fell by 1%.
Despite the dip, the figures were better than analysts had been expecting and Adidas said that sales were up 9% when the impact of the Yeezy business was excluded.
Adidas scrapped its tie-up with West in October last year following the rapper’s anti-Semitic comments. At the time, the firm said: “Adidas does not tolerate antisemitism and any other sort of hate speech.”
In its latest results, Adidas said sales in North America had fallen by 20% as the region was particularly affected by the ending of the Yeezy business.
“The decline in Lifestyle and the loss of Yeezy are of course hurting us,” said Adidas chief executive Bjorn Gulden.
Adidas added that if it decided not to “repurpose” its remaining unsold Yeezy stock, this would hit its operating profit by €500m this year.
The company is being sued by investors who claim Adidas knew about Kanye West’s problematic behaviour years before it ended their partnership.
Investors allege Adidas failed to limit financial losses and take precautionary measures to minimise their exposure.
In response, Adidas said it rejected “these unfounded claims”, adding that it would take “all necessary measures to vigorously defend ourselves against them”.
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