HERZOGENAURACH, Germany (Reuters) - Adidas forecast slower sales and profit growth for 2018 but lifted its 2020 profitability forecast and shares of the German sportswear firm looked set to get a boost from news of a large buyback.
Adidas, which has seen its shares fall 15 percent in the past six months as its growth cooled, said late on Tuesday it plans to buy back up to 3 billion euros ($3.7 billion) worth of its shares by 2021, or almost 9 percent of its share capital.
The German company's shares were indicated up 4 percent in pre-market trade.
Adidas forecast currency-neutral sales would rise around 10 percent in 2018, with an operating margin of between 10.3 and 10.5 percent, up from 9.8 percent in 2017. It estimated net profit from continuing operations would increase by between 13 and 17 percent.
It also lifted its 2020 profitability target, aiming for net income from continuing operations to grow by an average of 22 to 24 percent per year, from a previous 20-22 percent, and the operating margin to hit 11.5 percent by 2020, up from a previous target for 11 percent.
Since taking over in 2016, Chief Executive Kasper Rorsted has put a bigger focus on improving profitability, which still lags bigger rival Nike. The U.S. firm trades at a premium to Adidas even though it is growing more slowly.
Adidas said fourth-quarter sales rose 12 percent to 5.06 billion euros, a currency-neutral rise of 19 percent, but missing analyst forecasts for 5.13 billion as sales in Russia and at its Reebok brand slipped.
Fourth-quarter operating profit more than tripled to 132 million euros, beating analyst forecasts for 61 million, but the company recorded a net loss of 41 million euros after a tax impact of 76 million due to changes in the U.S. tax code.
($1 = 0.8063 euros)
(Reporting by Emma Thomasson; Editing by Maria Sheahan and Susan Fenton)
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