It is no secret that Russia is trying to cope with numerous challenges. Its central bank decided to keep stock market trading on the Moscow Exchange suspended again on Wednesday, keeping only a limited range of operations.
The country’s central bank restricted stock trading all of last week after the West imposed severe economic sanctions. Last month, the Russian Federation invaded Ukraine.
Many companies left the Russian Federation and Adidas is one of them. The company warned of a hit sales from closing operations in Russia and Covid-19 disruptions in Vietnam but a brighter China outlook helped the company. As a result, its shares jumped 10% on Wednesday.
The closure of factories in Vietnam due to the pandemic means a shortage of products will cut first-quarter sales by 600 million euros. However, Adidas expected the situation to improve from the second quarter.
The company operates hundreds of stores in Russia. On Monday, Adidas made an important announcement. It closed its stores in the country along with online sales.
The company’s shares traded up 10.2% at 10:30 GMT, supported by the relatively upbeat outlook for 2022, especially for China.
Adidas signed contracts with local athletes. It also plans to design more products for the local market as it wants to compete with local brands.
According to Adidas, the situation in Ukraine posed a risk to sales of up to 250 million euros, about half its revenue in the region in 2021, or 1% of total group sales.
The company already recorded sales of about 100 million euros in the region prior to closing its stores. Adidas could make a further 100 million euros if it resumes operations in Russia or if its shifts products to other markets.
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