Adidas says conflict with Russia will impact 2022, halts sales in region – Footwear News
Adidas is one of many retailers expecting to see sales decline due to the effects of the conflict between Russia and Ukraine.
The German sportswear retailer on Wednesday shared an updated outlook for fiscal year 2022 that takes into account up to 250 million euros, or approximately $275 million at current exchange rate, risk from impacted operations in Russia. . This represents approximately half of Adidas’ revenue in the region and an impact of approximately one percentage point on Adidas’ overall growth.
Like Nike, Puma, Under Armor and other companies, Adidas recently suspended all retail and online sales in Russia, which partly explains the business impacts in the region. Adidas has also closed offices and stores in Ukraine.
“Unfortunately, we are releasing our 2021 results in troubled times,” Adidas CEO Kasper Rorsted said in a press release. “Our thoughts and prayers are with the people of Ukraine, our teams on the ground and everyone affected by the war. We strongly condemn all forms of violence and stand in solidarity with all those who call for peace.
Even with Russia’s risk factors, Adidas still expects currency-neutral sales to rise between 11% and 13%, continuing on the path to recovery.
“As far as Russia is concerned, we fully support and strictly follow all sanctions imposed by the German and European governments,” said Harm Ohlmeyer, chief financial officer of Adidas.
Earlier this month, Adidas suspended its partnership with the Russian Football Union (RFU), the governing body that oversees football in Russia. Adidas also donated $1 million to Ukrainian refugees and charities.
In 2021, net sales increased by 16% on a currency neutral basis to reach €21.23 billion, or 23.3 billion dollars at the current exchange rate, below forecasts between 17 and 18% growth. Sales revenue is still below pre-pandemic levels, but up from 2020. In the fourth quarter, sales fell 3% on a currency-neutral basis.
In 2021, Adidas faced continued consumer boycotts of Western-made products in China, pandemic-related lockdowns and factory closures, supply chain issues and inflation. According to the leaders, these problems amounted to a €1.5 billion euros of loss of revenue growth in 2021, including a €400 million euros loss in Q4.