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From the moment 2019’s starting gun rang out, JD Sports shares have sprinted off into the distance.

Opening at £3.44 – having fallen from an all-time high of £5.19 in mid-September 2018 – the high street retailer has surged to a current trading price of £5.12 , a 51% increase since the start of the year. It also means that a well-received annual update could see it reach a fresh record peak.

The company gifted investors a belated Christmas present on January 14th, with a pretty fantastic trading statement. For the cumulative 48-weeks to January 5th, total sales rose 15%, with like-for-likes climbing ‘more than 5%’, an acceleration of the 3% increase seen at the financial year’s half way point. This included a ‘consistently positive like-for-like performance across Black Friday and the Christmas period’.

Arguably even better was news that gross profit margins were maintained at prior year levels, with JD Sports highlighting its policy ‘not to enter into short-term reactive discounting unnecessarily’, something that hurt other retailers around the holiday season.

The pinnacle of the update? The firm claimed that its full year group pre-tax profit would be at the upper end of the £325 million to £352 million guidance range. At a mid-point of £338.5 million, that’d be a 14.7% improvement on the previous year’s £295 million.

Tuesday’s full year report is also the first proper statement since JD Sports announced it was buying trainer-rival Footasylum for £90.1 million, an acquisition that still requires shareholder approval. An update on this purchase will be very much welcome, specifically what intentions the company has for the brand.

JD Sports shares have a consensus rating of ‘Buy’ alongside an average target price of £5.09.

This article is brought to you in association with Spreadex. All opinions expressed in this article are from the author and do not necessarily represent the opinions of The Armchair Trader. You can find out more about Spreadex products and services here, or find more articles from Connor Campbell here.

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Please note this article does not constitute investment advice. Investors are encouraged to do their own research beforehand or consult a professional advisor.

Connor Campbell

Connor Campbell

Connor joined Spreadex in 2014 as part of a newly expanded financial analyst team after graduating from the University of Southampton with an MA in English. His focus is on providing Spreadex's customers with up-to-date and informative news, and is responsible for the market analysis found on the Spreadex website.

Connor produces three daily market updates, a daily stock earnings preview, a weekly financial market preview piece every Friday, a round-up of all the big financial stories making the weekend press every Monday morning and regular stock market features.

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