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Adidas Q4 revenue up 12% on China, US sales and retro trend


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 12 per cent 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 10 per cent when adjusted for currency swings, Adidas said on Wednesday. Shares rose as much as 6.3 per cent to 183 euros (S$297) in early Frankfurt trading.

Adidas is benefiting from the popularity of its retro sneakers, which helped the company steal market share from larger rival Nike Inc and smaller competitors. Chief executive officer 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," Mr Rorsted told Bloomberg Television. "There is still a long way to go for us in the US."

Though still unprofitable last year, Reebok is now "very close to break-even", Mr Rorsted said, adding that he was "very satisfied" with its progress.

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 also said that net income from continuing operations will rise at a faster pace each year through 2020, and lifted its target for the operating margin to reach 11.5 per cent then, from an earlier prediction of 11 per cent. Mr Rorsted said he expects online sales, which are more profitable than those in stores, to reach as much as 30 per cent of the total.

The company on Tuesday said it will buy back its own shares for as much as three billion euros through 2021. BLOOMBERG