JD Sports remains cautious as sales weaken
JD Sports Fashion's latest sales update reveals a worsening decline in the past few months, but the retailer believes the figures are skewed by last year's World Cup.
Biding time: JD says it is well positioned to take advantage of ‘strategic opportunities'
The group, which operates 350 JD Sports and Size? outlets in the UK, said like-for-like sales for the first 18 weeks of the financial year declined 2.8%, compared to a 1.2% decline in the first eight weeks.
The Bury-based firm warned it was harder to interpret underlying trends as the period coincided with the period running up to the World Cup - but maintained its cautious outlook due to the ongoing squeeze on consumer spending.
JD's stock was down 49.5p at 930p in trading today.
The company said its caution continued to be based on the 'very clear downward pressures' on spending in its market and the increased VAT take.
It added that overall group trading remained in line with earlier management expectations.
Looking ahead, the company said it was well positioned to take advantage of 'any strategic opportunities' that arose.
The retail sector received a boost in the run up to last year's World Cup as consumers bought more sportswear as well as new TVs and food and drink.
JD reported a 4.1% increase in like-for-like sales in the same 18-week period last year.
View from the City
'The first quarter figures are in line with our expectations but, although not mentioned in the statement, one deduces that they are behind management expectations,' said Freddie George of broker Seymour Pierce.
'We are retaining our buy recommendation and our price target of 1100p although we might see some profit taking in the stock after its near 10% rise in the last month.
'Earnings will continue to benefit from the development of the company's own label ranges, growth in the internet offer and the development of the wholesaling activities. In addition, the company has scope to make further acquisitions with net cash in the balance sheet.'
Mark Photiades of broker Singer Capital Markets said: 'We believe the shares are fairly valued however JD remains an extremely well managed business with both domestic and international growth potential. A strong balance sheet also gives flexibility and firepower.'
Asset manager Investec said: 'With next year's Olympics likely to stimulate demand and with its well-defined retail proposition, JD remains our key pick within the sports retail sector.'
Most watched Money videos
- BMW meets Swarovski and releases BMW i7 Crystal Headlights Iconic Glow
- Blue Whale fund manager on the best of the Magnificent 7
- MailOnline asks Lexie Limitless 5 quick fire EV road trip questions
- Skoda reveals Skoda Epiq as part of an all-electric car portfolio
- BMW's Vision Neue Klasse X unveils its sports activity vehicle future
- How to invest for income and growth: SAINTS' James Dow
- 'Now even better': Nissan Qashqai gets a facelift for 2024 version
- Mercedes has finally unveiled its new electric G-Class
- Mini celebrates the release of brand new all-electric car Mini Aceman
- 2025 Aston Martin DBX707: More luxury but comes with a higher price
- Land Rover unveil newest all-electric Range Rover SUV
- Tesla unveils new Model 3 Performance - it's the fastest ever!
- Don't try to be a super woman - build a dream team! The...
- The plant that can add £10,000 to the value of your home...
- Reckitt Benckiser under the cosh over baby formula, says...
- Stock market given a shot in the arm as Raspberry Pi and...
- Recruitment in private sector falls for tenth month in a row
- Business leaders call for flagship scheme to get young...
- Helium and hydrogen company set to join stock market in...
- Britain's nascent battery industry receives shot in the...
- CITY WHISPERS: Bill Ackman's cerulean eyes charm...
- Cost-of-living crunch wipes shine off Thomas Sabo jewellery
- Where is Labour's 'white heat' revolution to revive...
- FTSE 100 hits an all-time high - but remember the stock...
- British businesses awash with 'accidental' bosses who...
- Shipping broker Clarksons on list of shame after...
- North Sea projects worth £21bn put at risk by Labour: Tax...
- Virgin Money's biggest independent investor...
- JOHCM UK EQUITY INCOME FUND: Rate cuts... and a spending...
- TONY HETHERINGTON: Boss behind firms fined £340k for more...