Adidas flags possible €250m revenue hit from Russia exit

The firm also forecasts an 11% to 13% increase in currency-neutral sales this year

The sportswear giant suspended operations in Russia on Monday. 

Adidas expects a halt to its Russian operations to put up to $273.1m (€251m) of sales at risk this year, but forecast a bounce in its China business.

The sportswear giant suspended operations in Russia on Monday. It operates about 500 stores in the country, a quarter of its total. It also suspended its online shopping site there. Adidas said the risk from the Russia closures was about half of the company's total revenue in the region.

However, the firm forecasts an 11%-13% increase in currency-neutral sales this year, with Greater China set to see sales increase in the mid-single digits. That's following a Chinese consumer boycott in 2021, when the company said it did not source cotton from Xinjiang after reports of human rights abuses.

The closure of factories in Vietnam, due to Covid, means a shortage of products will cut first-quarter sales by €600m before a strong rebound from the second quarter, CEO Kasper Rorsted said.

Adidas shares were up nearly 14%, helped by the relatively upbeat outlook for 2022, especially for China, with analysts noting the earnings forecast was ahead of consensus expectations.

Multinationals abandoning Russia

Meanwhile, Nestlé, Philip Morris and Imperial Brands have joined the list of multinationals stepping back from Russia as pressure mounts from consumers in the West to take a stand against the invasion of Ukraine.

The world's biggest packaged food group fell into line with rivals Procter & Gamble and Unilever in halting investment in Russia, while cigarette maker Philip Morris said it would scale down manufacturing and Imperial went further and suspended it.

The moves came after Coca-Cola and McDonald's halted sales in Russia, where a senior member of the ruling party has warned that foreign firms which close down could see their operations nationalised.

PepsiCo and Starbucks have also joined the dozens of global companies closing stores, factories or exiting investments to comply with sanctions or due to supply disruptions. 

Those supply hurdles include the world's top three shipping giants suspending container routes.

In response to the exodus, Andrei Turchak, secretary of the ruling United Russia party's general council, warned that Moscow might nationalise idled foreign assets. "We will take tough retaliatory measures, acting in accordance with the laws of war," Mr Turchak said.

- Reuters