JD Sports Soars As Strong Growth Defies High Street Gloom
Fiona Cincotta September 10, 2019 10:05 AM
The sports retailer reported 10% growth in like for like sales. Pre – tax profits increased 6.6% to £129.9 million whilst revenues increases an eye watering 47% to £2.72 billion.
JD Sports performance has been nothing short of stellar whilst the rest of the UK high street struggles with lower consumer spending and changing shopping habits. So why is JD sports doing so well is such a tough retail environment?
1) JD is tapping into the booming “athleiseurewear” trend. By successfully targeting younger customers who are driving the trend for athleisure, wearing sports clothes have become more acceptable in school, work and socially.
2) A sound strategy has helped expansion across Europe. 23 stores have been opened including the first in Austria. Although still early days there is a growing sense that JD sports is developing the same “emotional resonance” with European customers as it has with its core UK and Irish customers.
Areas of concern?
Whilst JD said that it enjoyed an encouraging performance in the US following the takeover of US retailer The Finish Line, the figures are not quite so convincing. Lower margins on Finish Line products saw a 1.3% decline in the retailers’ gross margin. The US brand has also seen the closure of 10 stores. Whilst expansion into Europe and Asia is going well, the US is proving a little more challenging so this should be an area to keep an eye on.
More upside to come?
Despite a touch of weakness in the US, JD Sports has had a phenomenal run, lifting the share price by 5% in early trade and over 36% across the past 6 months. The strong growth shows no signs of slowing down.
Disclaimer: The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.
Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex and commodity futures, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to Forex.com or GAIN Capital refer to GAIN Capital Holdings Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.