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.
- Are JD Sports still a buy for investors?
- Can JD Sports hold its value after Footasylum deal?
- Peter Watson on JD Sports
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.