Adidas expects to lose $246 million in profit by the end of the year after cutting ties with Ye.
The Germany sportswear company said Tuesday that it had ended its partnership with Ye because of his "unacceptable" comments and actions.
Their agreement was about to end.
The high seasonality of the fourth quarter will have a short-term negative impact on the company's net income.
The company made a net profit of over one billion dollars in 2011.
According to analysts from Baird, Yeezy generated over one billion dollars for Adidas. Around 8% of Adidas' revenues last year would have been this.
The analyst estimated that the line brought in between 1.5 billion and 2 billion annually.
One of the most successful collaborations in our industry's history is the partnership between Adidas and Yeezus.
Based on the assumption that less than 40% of the money that would otherwise be spent on Yeezy is still spent on other products at Adidas, the sales estimates for the fourth quarter were reduced by 8%.
The analysts estimated that the operating margin was over 30% because of its high price points and large proportion of direct-to- consumer sales.
Adidas said Tuesday that it was the sole owner of the design rights to all of the products. The company will give more information at its third-quarter earnings announcement.
According to Forbes, Ye's design company got a 15% royalty on wholesale revenue when his partnership with Adidas began. The report said that the business made $191 million in royalties from the Adidas deal.
According to his estimates, the royalty fee could be between $150 million and $200 million per year.
According to Forbes, the loss of the partnership would cause Ye's net worth to fall to $400 million.
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