Asos has said it is braced for a £14m hit because of its decision to stop selling clothes in Russia following the country's invasion of Ukraine.
The online fashion giant also confirmed it fell to a pre-tax loss for the six months to the end of February, spending heavily on an overhaul to win over more customers longer term.
In a statement issued to the London Stock Exchange, bosses said they saw a marked slowdown in sales during the period as the benefits from the Covid-19 pandemic eased with shoppers able to head back to high streets.
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Sales still rose by 1% to £2bn in the six-month period but a £106.4m pre-tax profit in 2021 turned to a £15.8m pre-tax loss for the six months to the end of February.
The retailer said it felt the effects of supply chain disruption and limited stock availability and expects the next six months to be more challenging due to inflationary pressures, the PA news agency said.
But bosses were hopeful that sales growth will accelerate this year, highlighting improvements in stock levels, a return of event and holiday-led demand and an easing of supply chain issues.
Losses were attributed to £30.6m spent on upgrading the business.
These included £7.9m on launching a new strategy for the fashion retailer, £5.5m to move from the junior AIM stock market to the main FTSE stock exchange, £18.3m relating to its Leavesden, Hertfordshire office and £6.4m due to its takeover of Topshop.
Chief operating officer and finance chief Mat Dunn said: "Asos has delivered an encouraging trading performance, against the continuing backdrop of significant volatility and disruption."
He added: "We've entered the second half of the year well placed, and believe that our stock position, with increased product availability and newness, will stand us in good stead."
In the UK sales grew 8% to £895.5m, although the company admitted it missed out on sales for events in January, however, bosses said it had a strong Christmas period despite the Omicron variant of coronavirus causing uncertainty.
Sales in Europe were up 1% to £577.4m, where there was greater impact from supply chain problems and Covid-19 restrictions - particularly in France.
And in the US sales rose 11% to £252.7m, where bosses are hopeful of winning over new business.
This included the successful launch of two physical stores inside department store Nordstrom and plans for two new "retail concepts" in store in February.
