​Adidas on Wednesday reported a big loss in the fourth quarter of last year and cut its dividend following the costly breakup of its partnership with rapper Kanye West’s Yeezy brand, CNBC reported, cited by News.ro.

In 2023, the company expects a loss of 700 million euros, which will be the first annual loss in the last 31 years.

In the fourth quarter of 2022, the German sportswear giant posted an operating loss of 724 million euros ($763 million) and a net loss from continuing operations of 482 million euros.

Adidas’ board of directors is recommending a dividend of 70 euro cents per share at the annual general meeting on May 11, up from 3.30 euros per share in 2021.

The loss estimate for 2023 includes €500 million from possible Yeezy inventory reductions and €200 million in “one-off costs.”

Adidas is afraid that it will remain in stock of the Yeezy brand

In October, Adidas ended its lucrative partnership with rapper and fashion designer Ye, which was used by Yeezy icon Kanye West, after he made a series of anti-Semitic comments.

The company previously reported a severe cut of up to €1.2 billion in revenue if it is unable to replace its huge inventory of unsold Yeezy shoes.

The company said underlying operating profit would be “roughly break-even,” reflecting the loss of €1.2 billion in potential sales from unsold Yeezy inventory.

Adidas’ new CEO Bjorn Gulden, who replaced Kasper Rorsted at the start of the year, said in a statement on Wednesday that 2023 would be a “transition year” as the company plans to cut inventories to return to profitability in 2024.

“Adidas has all the ingredients to succeed, but we need to refocus on our core: product, consumers, retail partners and athletes,” Goulden said.