Adidas predicts growth in 2022 but forecasts impact of suspended Russia sales
German sportswear company Adidas has revealed that its suspended trading in Russia will put up to £206 million (€250 million) at risk this year, but forecast a bounce in its fiscal year 2022 results.
The company suspended its operation in Russia on Monday, which includes around 500 stores and its ecommerce site.
In 2021, Adidas recorded a 16% increase in revenues on a currency-neutral basis, reflecting broad-based growth across all market segments and categories. Net sales at the group increased 15.2% to £17.64 billion (€21.2 billion) year on year, in the year to 31 December 2021.
In the fourth quarter, Adidas reported a 3% fall in currency-neutral sales to £3.907 billion (€5.137 billion), due to a 24% drop in Greater China sales. The company was hit by a consumer boycott as part of a consortium of Western brands, after raising concerns about reports of human rights abuses in China's Xinjiang region.
Looking forward, Adidas expects a 11% to 13% increase in currency-neutral sales in 2022, taking into consideration the closure of its business in Russia and Ukraine. The company expects sales in Greater China to increase in the mid-single digits after a consumer boycott in 2021.
Kasper Rorsted, CEO of Adidas said in a statement: "Unfortunately, we release our 2021 results in unsettling times. Our thoughts and prayers are with the Ukrainian people, our teams on the ground and everyone affected by the war. We strongly condemn any form of violence and stand in solidarity with all those calling for peace. We also provide immediate humanitarian aid to those in need of support. We will continue to follow the situation closely and take future business decisions and actions as needed, always prioritizing our employee’s safety and support.
"In 2021, we delivered a strong set of results despite several external factors weighing on both demand and supply throughout the year. Wherever markets operated without major disruptions we have been experiencing strong top-line momentum. In 2022, we will build on this momentum and continue to grow both our top- and bottom-line at double-digit rates amid heightened uncertainty."