How Adidas Rebuilt After the Yeezy Split and What Comes Next

Adidas faced a sharp crisis after ending its Yeezy partnership with Kanye West in October 2022. The split left the company with more than $1 billion in unsold inventory and contributed to Adidas's first annual net loss in over 30 years in 2023. The company's recovery since then has been deliberate and multi-pronged.

At the Fast Company Innovation Festival on Sept. 17, 2026, CEO Bjørn Gulden described the actions Adidas took to regain momentum and the new pressures it now faces. The recovery is measurable: Adidas returned to profitability in 2024 and recorded $28 billion in revenue in 2025. But Gulden also warned that the sportswear category is "not very sexy" to investors right now and that sustaining the comeback will be a test in a challenging market.

Shifting decision-making out of headquarters

Gulden said a crucial early change was decentralizing authority. He argued Adidas had too many layers at headquarters that tended to say "no," slowing decisions. The company intentionally moved power to local markets and to lower levels of the organization so good ideas could rise faster.

Gulden emphasized that Germany, Adidas's home market, represents a relatively small share of global business. Markets such as Japan, Korea, and China generate similar levels of innovation, storytelling, and energy. Letting regional teams act reduced internal friction and accelerated product and marketing moves.

Bringing athletes back into product development

Marc Makowski, head of product innovation, said Adidas revamped its innovation lab culture. He described the lab he inherited as feeling like a museum and argued that not having athletes regularly involved was a problem. The company now centers athletes in development and uses practical testing to inform design.

A concrete product example is the Adizero Adios Pro Evo 3, released in 2026. At 97 grams, Adidas calls it the lightest running shoe the company has made. Runners Sabastian Sawe and Yomif Kejelcha used the shoe in sub-two-hour marathon efforts, which Adidas highlights as evidence of performance capability.

Marketing, fan engagement, and the costs involved

Competitive and reputational context

Gulden acknowledged that investors are skittish about the sportswear sector right now but said he focuses less on short-term share movements. He complimented Nike as a "fantastic company" while noting media scrutiny of its stock. By some measures this year, Nike shares had fallen more than Adidas's, though both faced pressure.

The company also navigated reputational issues involving sponsored athletes. In July, Sophie Cunningham, an Adidas-sponsored WNBA player, publicly said transgender women should not compete in women's sports. The comments sparked intense debate and a split in public reaction. Gulden deferred handling of the issue to U.S. management and said companies must accept mistakes and apologize when appropriate. Cunningham has publicly stood by her remarks.

Adidas has re-established profitability and revived revenue growth, but its next challenge is sustaining momentum in a crowded, uneven market. Key indicators to monitor are regional execution outside Germany, product performance tied to athlete testing, marketing spend versus margin recovery, and how the company manages athlete controversies.

The company's approach — decentralized decision-making, athlete-centered innovation, and heavy marketing bets — has produced measurable gains. The near-term question is whether those gains can persist without repeating the sharp profit swings seen during the recovery.