JD Sports (JD.) lead the pack with impressive annual results

Last year’s heatwave cause outdoor business to report a loss, but overseas expansion balanced it out.

Article updated: 16 April 2019 11:00am Author: Ian Forrest

  • JD conquer rising costs and lower footfall with a 15% rise in full-year profits resulting in a 2% share price boost in early trading.
  • Expansion overseas has started to bear fruit and investors benefit from a 5% rise in dividend.
  • Shares trade on a premium to the sector average, therefore the shares are no better than a ‘hold’.

Retailer JD Sports defied gloom in the sector today by announcing a 15% rise in full-year profits, along with an impressive 6% increase in like-for-like sales in its stores. The company is battling with many of the same problems that face others in the sector, including rising costs and lower footfall on the high street. It wasn’t all good news as the outdoor business, which includes Blacks and Millets, reported a loss of £4.3m partly due to the heatwave last year. However, the company is expanding overseas with new stores in Europe and Asia, along with the acquisition of a store chain in the US and investors will benefit from a 5% rise in dividends.

The market responded positively to the figures with a 2% rise in early trading adding to the impressive share performance since the beginning of the year which has taken the market cap above that of Marks & Spencer and firmly into FTSE 100 territory.

Our View on JD Sports Fashion - Hold

While the management have clearly got their retail offer right and are expanding into new markets, the shares already trade on 16 times 2020 forecast earnings which is a premium to the sector, so they are no better than a ‘hold’ for now.

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Ian Forrest

Investment Research Analyst

Ian’s background in investments, financial journalism and research has seen him advising private investors on equities and helping to manage portfolios. His qualifications include the Certificate in Financial Planning and the Chartered Institute for Securities & Investment’s Investment Advice Diploma.