Adidas reports 2017 profit rise as worldwide sales jump

GERMANY-COMPANY-RESULTS-ADIDAS

Kasper Rorsted chief executive of Adidas

Adidas forecast another year of sales and profit growth for 2018, albeit at a slower pace than in 2017, as the German sportswear firm reported fourth-quarter sales that undershot analyst forecasts and a net loss due to a one-off USA tax hit. Net income from continuing operations is projected to increase to a level between 1.615 billion euros and 1.675 billion euros.

"Our strategic growth areas were the main drivers of our performance" in 2017, chief executive Kasper Rorsted said in a statement, pointing to a 27-percent surge in North American sales, adjusting for currency effects, and a 29-percent leap in China.

Currency-adjusted sales in Western Europe, Latin America, the Middle East and Africa and Japan all enjoyed double-digit increases, with the only dark spot a 13-percent slump in Russian Federation and the former Soviet Union. This development mainly reflects an 18% increase at brand adidas.

The group expects currency-adjusted sales to grow around 10 percent in 2018, combining with efficiency savings to produce an operating profit between 9.0 and 13 percent higher. The company projects the operating margin to increase between 0.5 and 0.7 percentage points to a level between 10.3% and 10.5%.

Adidas (ADSGn.DE) plans to buy back up to 3 billion euros ($3.72 billion) of its shares by May 11, 2021, representing nearly 9 percent of its share capital, it said on Tuesday, including up to 1 billion euros this year.

On Wednesday, Adidas said quarterly sales rose 12 percent to 5.06 billion euros, a currency-neutral rise of 19 percent, but missing average analyst forecasts for 5.13 billion.

Adidas will mostly fund the buybacks from its cash reserves, while a smaller share will be paid for by borrowing at favorable rates on capital markets, it said.

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