JD Sports Fashion PLC (LSE:JD.) is expected to maintain its momentum in gaining market share thanks to a "favourable" environment, according to Shore Capital.
“With its established competitive positioning and stronger balance sheet, JD is poised to navigate the highly promotional market,” said the broker.
This year is expected to remain extremely promotional due to high inventory levels although “there are some tailwinds to take advantage of,” including low unemployment and supply chain issues easing.
Adidas’ uncertain partnership with Yeezy could also create opportunities for other brands, such as On Running and New Balance, to gain more shelf space and sales in stores.
Analysts noted that the FTSE 100 retailer is insulated from the volatility of the market thanks to its lower sales mix participation in the promotional apparel category in the US and superior product allocation.
Consumer confidence will have a significant impact on sports players in 2023, said Shore Capital, with companies adopting different strategies to tackle the environment.
For example, Puma is prioritising market share gains at the expense of profitability, while US-based Hibbett Sports (NASDAQ:HIBB) will focus on cost-savings after a disappointing 2022.
Adidas, however, will “have a year of reset,” focusing on its core business to become profitable by 2024.