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JD Sports is going to be closely watched when it reports final results tomorrow. In an economic climate when major retail giants like Debenhams have been going to the wall, the fact that JD Sports was able to confirm its acquisition of Footasylum for GBP 90.1 million last week has analysts in a bullish mood about the sports wear company.

JD Sports reported last week that it had received acceptance for the acquisition from 92% of the Footasylum shareholders.

Like Mike Ashley and Sports Direct, who were recently the subject of discussion on The Armchair Trader’s podcast with Peter Watson, JD Sports seems to be on the hunt for good value acquisitions that are going to sit neatly with its existing business.

Footasylum, which listed on AIM in 2017 having been originally founded in 2005, has carved its own niche in the sports and fashion wear market and built a brand which it is understood JD Sports would like to hang on to.

JD Sports also recently picked up Pretty Green, the fashion line launched by Liam Gallagher, including some of its stores and many of its staff. The JD Sports plan seems to be to buy undervalued boutiques which, along with bringing additional customers to JD Sports, have a level of brand loyalty on their own merit which the company can promote through its own network.

JD Sports share price forecast: analysts seem positive

Analysts will also be looking for an update tomorrow on how the acquisition of Finish Line in the US is going. It acquired the US firm last year and investors in JD Sports shares will want to how what its plans are for the US business.

JD Sports shares opened up 1.31% this morning, signifying a level of bullishness ahead of the results. Shore Capital has already said that JD Sports’ double digit profit growth rate was rare for the retail sector but that the company has “several growth levers” that leave it in a position to continue along its growth path at a time when the rest of the retail sector is being hammered.

JD Sports shares have been moving since last week when they were trading at 500-505 on Tuesday afternoon. As of the time of writing they were at 520, with much of that action coming on Friday afternoon.

The market’s expectation seems to be very position for the company, and the bulk of brokers are rating it a strong buy at the moment.

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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.

Stuart Fieldhouse

Stuart Fieldhouse

Stuart Fieldhouse has spent 25 years in journalism and marketing, including as a wealth management editor for the Financial Times group, covering capital markets and international private banking, and as an investment banking correspondent for Euromoney in Hong Kong. He was the founder editor of The Hedge Fund Journal.

Stuart has worked at CMC Markets, supporting the re-launch of its global financial spread betting and CFD trading platforms. He is also the author of two books on trading, published by Financial Times Pearson. Based in The Armchair Trader’s London office, Stuart continues to advise fund managers, private banks, family offices and other financial institutions.

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