BERLIN (Reuters) – Adidas said on Wednesday it would cut its 2022 dividend as its split from rapper and fashion designer Kanye West could lead to its first annual loss in 30 years this year.

The German sports equipment manufacturer will propose a dividend for 2022 of 0.70 euros per share at its general meeting on May 11, against a coupon of 3.30 euros per share paid for 2021.

On the Frankfurt Stock Exchange, Adidas shares fell 1.14% to 142.80 euros.

Adidas placed its partnership with Kanye West under review in October after controversial statements from the rapper. The group warned last month that failing to sell existing stock of Yeezy-branded apparel would cut its revenue by around 1.2 billion euros in 2023 and its operating profit by around 500 million euros.

The group could even post an operating loss of 700 million euros if it decided definitively to no longer offer Yeezy products in the future.

“2023 will be a transition year to build the foundation for 2024 and 2025,” CEO Bjorn Gulden said in a statement on Wednesday.

“We need to reduce inventory and discounts. Then we can start building a profitable business again in 2024,” he added.

The end of restrictions related to the COVID-19 pandemic in China should boost sales of major retail brands for which China is a key market. But for Adidas, that boost will likely be negated by the impact of setbacks with Yeezy, which will make it difficult to compete with rivals Nike and Puma.

Wedbush analysts who track new sneaker product launches said Nike is likely to take market share from Adidas in the absence of new Yeezy models.

(Report by Alexander Huebner, written by Friederike Heine, Dina Kartit, edited by Blandine Hénault)

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