Adidas' chief financial officer Harm Ohlmeyer, left, and chief executive Bjørn Gulden, right, have spoken about the company's financial state ©Getty Images

German sportswear brand Adidas could be facing its first annual loss in three decades after ending its nine-year partnership with Ye, the American rapper formerly known as Kanye West.

Adidas split with Ye last October after he made several antisemitic remarks on social media, resulting in the end of Yeezy-branded products.

It is reported that the Yeezy range accounted for eight per cent of Adidas' total sales in 2021 after generating $2 billion (£1.6 billion/€1.8 billion) that year.

Bjørn Gulden, the new chief executive of Adidas, said it had yet to decide what to do with the unsold stock of Yeezy products which is reportedly worth around $1.3 billion (£1.1 billion/€1.2 billion).

If Adidas opts to dispose of the products, it could see the company’s profit drop by $500 million (£414 million/€468 million) and suffer its first annual operating loss in 31 years.

Other factors cited for the losses include Adidas’ decision to close its stores in Russia in response to the war in Ukraine and a drop in sales of 36 per cent in China due to COVID-19 restrictions in the country.

Adidas ended its partnership with Ye, the American rapper formerly known as Kanye West last October following his antisemitic remarks on social media ©Getty Images
Adidas ended its partnership with Ye, the American rapper formerly known as Kanye West last October following his antisemitic remarks on social media ©Getty Images

According to CNN, Adidas’ operating profit dropped 66 per cent year-over-year to $705 million (£584 million/€660 million), while its shares have slipped by around two per cent.

Adidas' chief financial officer Harm Ohlmeyer admitted it had been a "disappointing year" for the sportswear giant.

"We definitely did not perfect as we should have performed," said Ohlmeyer.

Gulden said the company was in a "transition" year as it looks to return to profit in 2024.

"You will see us invest in more sport…because that is the DNA of this company," said Gulden.

Chloe Collins, head of apparel at data firm GlobalData, told Sky News that Adidas was 4.8 per cent behind pre-pandemic levels.

"In Q4, despite Adidas's sponsorship of winning team Argentina, the presence of the FIFA Men's World Cup was not enough to offset the negative impact of the Yeezy controversy on the brand or the fact that its designs lag behind rivals Nike and Puma," said Collins.