Adidas has reported a drop in sales but better than expected profits in the wake of its high-profile split from shamed rapper and fashion designer Kanye West.

The sportwear company said the loss of his Yeezy trainers brand was “hurting” the business but it pointed to some of the pain being eliminated by a recovery in sales in China.

Adidas had said in March it was still yet to decide what to do with a mountain of unsold Yeezy stock worth £442m – the legacy of its decision to part from West, now known as Ye, following antisemitic and other offensive remarks he made last October.

It had no update on Friday on its plans for the goods which could, potentially, be written off entirely or re-purposed.

Adidas said it was still on course to record its first annual loss in three decades this year, estimated at £612m, when it updated investors on its progress for the first three months of 2023.

Net sales declined 1% to £4.6bn while net profits fell to £52m from the £384m achieved in the same period last year, the company said.

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North America proved the main drag on sales but Adidas said partnerships with Bad Bunny, Pharrell Williams and Jerry Lorenzo’s Fear of God brand were helping it offset some Yeezy revenue losses.

Shares rose 8% as the numbers were significantly better than analysts had predicted.

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Market experts pointed to encouraging signs of recovery in China for the share price reaction.

Chief executive Bjorn Gulden told reporters that while Adidas was yet to make a decision on the Yeezy stock mountain, the options for the shoes had been narrowed down and it was getting closer to a decision.

Pippa Stephens, senior apparel analyst at GlobalData, said of the company’s update: “While Adidas’ troubles are largely down to the termination of Yeezy, with sales excluding this brand up 9%, it also has less desirable designs than its competitors which has driven away many of its formerly loyal shoppers.”

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