INTERNATIONAL - Adidas sent a message to investors who had feared a hard landing for the company’s growth story: there’s plenty of life left in those old sneakers.
Revenue at the German company jumped 12percent in the fourth quarter, led by China and North America.
The rebound comes after a slowdown in the third quarter, which sparked concerns and weighed on the shares. Revenue will also grow at a double-digit rate this year, at a forecast 10percent when adjusted for currency swings, Adidas said yesterday.
Adidas CEO Rorsted poses before the company's annual news conference in Herzogenaurach
Adidas is benefiting from the popularity of its retro sneakers, which helped the company to steal market share from larger rival Nike and smaller competitors.
Chief executive Kasper Rorsted said he expects a “very strong” year in the US, while sales growth in 2018 will decelerate in Western Europe and the Middle East.
“There is still tremendous growth opportunity in the US by introducing new products and new technology,” Rorsted said in an interview with Bloomberg Television. “There is still a long way to go for us in the US.”
Although still unprofitable last year, Reebok is now “very close to break-even”, Rorsted said, adding he was “very satisfied” with its progress.
Adidas CEO Rorsted poses before the company's annual news conference in Herzogenaurach
Reebok, which Adidas is repositioning as a fitness brand, remains the one unit not yet at the desired profitability after the company shed assets from golf equipment to hockey gear.
Adidas said net income from continuing operations will rise at a faster pace each year through to 2020, and lifted its target for the operating margin to reach 11.5percent then, from an earlier prediction of 11percent.
Rorsted said he expects online sales to reach as much as 30percent of the total.
An Adidas sign is seen before the company's annual news conference in Herzogenaurach