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.
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