Adidas is bracing for its first operating loss in more than three decades after giving the boot to Kanye West last year amid controversy.

The German apparel giant suffered a net loss of $540 million during 2022′s final quarter as it sat on unsold Yeezy products following its split with the rapper, the company said Wednesday.

Adidas expects an operating loss of $738 million in 2023, which CEO Bjorn Gulden described as “a transition year.”

“We can then start to build a profitable business again in 2024,” Gulden said. Adidas hasn’t experienced an operating loss over a full year in 31 years, according to CNBC.

Adidas cut ties with West, who goes by Ye, last October after repeatedly making anti-Semitic comments in interviews and online. The company said it was “immediately” ending production of West’s popular Yeezy line of shoes and clothing — a move Adidas said would cost it $246 million in net income in 2022.

“Adidas does not tolerate antisemitism and any other sort of hate speech,” Adidas said at the time. “Ye’s recent comments and actions have been unacceptable, hateful and dangerous, and they violate the company’s values of diversity and inclusion, mutual respect and fairness.”

West dropped below billionaire status following the breakup. Forbes, which valuated the Adidas deal at $1.5 billion, said the rapper’s net worth became $400 million after the company’s announcement.

Adidas is considering what to do with $1.3 billion worth of remaining Yeezy shoes. Gulden said the company could sell them and donate the proceeds, but it will not burn them, according to the BBC. The robust resale market for Yeezy products complicates the option of just giving them away, Gulden said.

The Grammy-winning West, known for songs such as “Jesus Walks” and “Stronger,” also lost collaborations with the fashion brands Gap and Balenciaga. In late October, West, 45, tweeted that he “lost 2 billion dollars in one day.”

The rapper’s controversial remarks last year included threatening in a tweet to go “death con 3 On JEWISH PEOPLE.”

He also claimed on the Revolt TV show “Drink Champs” that George Floyd’s death was caused by fentanyl rather than by convicted ex-cop Derek Chauvin kneeling on his neck.

Financial issues for Adidas also stemmed from revenues in China plummeting by about 50% and a rise in shipping and supply costs, the company said.

With News Wire Services