Adidas' Dividend Dilemma: Can the Company Rebuild Shareholder Value After Yeezy?

The Adidas Group's journey post-Yeezy has been a rollercoaster for investors, marked by a dramatic dividend cut in 2023 and a cautious recovery in 2025. The termination of its partnership with Kanye West in late 2022, following his antisemitic remarks, triggered a short-term financial crisis. According to a Reuters report, Adidas slashed its dividend from €3.30 per share in 2021 to €0.70 in 2023, a 78.8% reduction, as the company absorbed a €250 million hit to its 2022 net income and faced a projected annual loss of €700 million in 2023. This abrupt shift raised questions about the sustainability of its dividend policy and the resilience of its brand.

However, the company's strategic reinvention under CEO Bjørn Gulden has begun to restore confidence. By 2024, Adidas had stabilized its operations, and by 2025, it announced a recommended dividend of €2.00 per share, a 185% increase from 2024's €0.70. This rebound reflects a payout ratio of 43% of net income from continuing operations, comfortably within the company's target range of 30% to 50%. Yet, the current dividend yield of 0.78% as of December 2025, while modest, underscores the lingering uncertainty for income-focused investors according to Macrotrends data.

Strategic Reinvention: From Yeezy to Core Brand Resilience

Adidas' ability to rebuild shareholder value hinges on its post-Yeezy strategy, which prioritized cost discipline, inventory management, and product innovation. The company sold its remaining Yeezy inventory by the end of 2024, generating €650 million in revenue. This move allowed Adidas to refocus on its core brands, where it has seen robust growth. In 2025, currency-neutral sales for the Adidas brand rose by 12%, with operating profit surging to €1.337 billion-a €1 billion increase from 2024. Gross margin improved by 3.3 percentage points to 50.8%, driven by reduced discounts and inventory optimization.

Operational cost reductions have also been pivotal. Operating overhead expenses fell by 2.9 percentage points to 30.2% in 2025, contributing to an 11.1% operating margin, according to stockinvest data. These efficiencies align with Adidas' broader goal of maintaining profitability in a competitive market. The company's emphasis on localized product designs-spanning Originals, Football, and Running categories-has resonated globally, driving double-digit growth in footwear and apparel sales.

Brand Value and Future Outlook

Adidas' brand value has shown remarkable resilience. In Q2 2025, the company reported a 12% increase in brand sales, with footwear and apparel growing by 9% and 17%, respectively. The absence of Yeezy sales, which had contributed €200 million in Q2 2024 according to Sportico analysis, was offset by the success of core product lines. The Superstar and Terrace collections, along with collaborations and seasonal updates, have strengthened the Lifestyle segment, while innovations like the Adizero running shoe family have bolstered Performance offerings.

Looking ahead, Adidas projects operating profit to reach €1.7 billion to €1.8 billion in 2025, a trajectory that supports dividend sustainability. However, challenges remain. The company's reliance on global markets and its need to balance innovation with cost control could test its long-term stability.

Conclusion: A Cautious Optimism

Adidas' dividend dilemma reflects a broader narrative of corporate reinvention. While the Yeezy fallout exposed vulnerabilities in its business model, the company's strategic pivot has restored financial health and brand momentum. The 2025 dividend increase signals confidence in future earnings, but investors must weigh this against historical volatility. For now, Adidas appears to have navigated its darkest hour, though the path to consistent shareholder value creation remains contingent on sustaining its operational and brand innovations.