FRANKFURT, Germany (AFP)— Adidas on Wednesday reported a loss in 2023 due to the fallout from the end of its tie-up with Kanye West, but the company insisted it was starting to turn its fortunes around.

In late 2022, the German sportswear giant ended its contract with the US rapper, now known formally as Ye, after he triggered an outcry with a series of anti-Semitic social media posts.

Adidas and West had designed the blockbuster line of Yeezy trainers together, and the collapse of the partnership robbed the company of a vital revenue stream, and left it saddled with a massive stock of unsold footwear.

Adidas registered a loss of 75 million euros (US$82 million) in 2023 – it’s first for many years — following a profit of 612 million euros the previous year.

But CEO Bjorn Gulden, who was brought in to lead the company from rival outfitter Puma shortly after the West tie-up fell apart, struck an upbeat tone.

“It will take a long time to turn the business (around)… The result is of course not good enough,” he told a press conference.

“But it builds the base to actually achieve what we have promised.”

The 2023 results were not as bad as had been previously feared, and by “2025 we should already be a good company and by 2026 we should be a really healthy company,” he said.

Revenues fell by five percent to 21.4 billion euros, and were hit particularly hard in the United States due to the discontinuation of sales of Yeezy trainers.

Adidas has been gradually seeking to offload the Yeezy trainers, with two sales in 2023 bringing in 750 million euros. However, this is below the 1.2 billion euros of revenue they had generated in 2022.

The company expects to sell off the final Yeezy shoes this year at cost, resulting in revenues of around 250 million euros.

While sales fell heavily in North America, and are expected to keep declining this year, they picked up strongly in China, in good news from an important market which had suffered due to the country’s tough coronavirus curbs.

Gulden has sought to focus on promoting classic Adidas trainers — such as Samba, Gazelle and Campus — and Adidas said sales of the products were growing well.

Adidas is forecasting a pick-up in business for 2024, with sales expected to grow in the “mid single-digit” range, and operating profit to come in at around 500 million euros, double the figure for 2023.

With Germany to host the European football championships in June-July, and Paris the Olympics right after, Adidas is poised to bag additional sales from jerseys and related merchandise.

Still, the company’s forecast was several hundred million euros below what analysts were predicting, and some were disappointed the company did not boost what they saw as an underwhelming outlook.

Deutsche Bank said there were no surprises in the results, and that 2024 was set to be “another transition year” for the company.

“All eyes are on the future prize and the building blocks to get there,” it added.

Adidas shares were little changed in Frankfurt after the results were released.