Andrea Felsted is a Bloomberg Gadfly columnist covering the consumer and retail industries. She previously worked at the Financial Times.

Unlike the scene at one of its Kanye West fashion shows, Adidas AG didn't keep the market cooling its heels for the main event.

Rather than waiting for next week's strategy update, CEO Kasper Rorsted didn't hang around. On Wednesday, he unveiled a set of higher targets for sales and profit through 2020 -- as well as a 41 percent rise in profit last year.

Earnings Run
Adidas expects earnings from continuing operations to rise as much as 20 percent
Source: Bloomberg/company filings

Adidas is on a tear, and Rorsted now wants to keep up the momentum. But he has little room for trip-ups.

Trainers and athletic wear are one of the few parts of the apparel market where consumers are spending. The collaboration with West has created a buzz around the Adidas brand, while its retro Stan Smith and Superstar sneakers are loved by millennials on both sides of the Atlantic.

That's helped Adidas to capture sales in the U.S., where it has a 10 percent share of the market, compared with Nike Inc.'s 45 percent, according to analysts at RBC Capital Markets.

Just Doing It
Adidas shares have jumped almost 80 percent over the past 12 months
Source: Bloomberg

The shares have been as in demand as Kanye's latest Yeezy Boost trainer -- they rose as much as 9 percent on Wednesday, bringing their gain for the year to almost 80 percent. The now stock trades at about 29 times estimated earnings, a steep premium to Nike's 22 times.

Adidas Premium
The company now trades at a higher multiple of earnings than rival Nike
Source: Bloomberg

Rorsted rightly wants to make Adidas more like a fast fashion retailer by cutting the time it takes to get products to market. Digital will also play an increasingly important part: the CEO has doubled the target for online sales.

Having more in-demand styles in stock augmented by more sales online -- already the most profitable channel -- should help lift the operating margin, which still trails Nike.

Closing In
Adidas's margin is catching up with rivals
Source: Company Reports, Bloomberg
Nike is based on Bloomberg consensus forecasts for the year to May 31 2017

The measure rose to 7.7 percent last year from 6.5 percent in 2015. The company forecasts a further widening to as much as 8.5 percent this year. Better, but still short of Nike's 13.5 percent margin.

But there are risks to his plan. Fashion is notoriously fickle, and Adidas has been on the right side of the trends for some time now.

Continuing to take share in the U.S. will require heavy investment, as will turning around Reebok, a business which Rorsted is keeping for now. Capital expenditure will almost double this year to 1.1 billion euros.

And there's still the matter of overhauling Adidas's portfolio: the company is selling its golf brands and its ice hockey arm, CCM Hockey.

Meanwhile, a strong dollar could crimp that margin expansion, and longer term, a U.S. border tax could too.

There's no arguing with the fact that Adidas has been a stellar performer, and Rorsted may well keep things going in the right direction. But keeping such a pace up in the next lap of this race looks increasingly difficult.

This column does not necessarily reflect the opinion of Bloomberg LP and its owners.

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Andrea Felsted in London at

To contact the editor responsible for this story:
Edward Evans at