When JD Sports Fashion PLC (LSE:JD.) reports interims on Thursday 21 September investors will be hoping that the shoplifting epidemic which is plaguing high streets in both the UK and the US hasn’t damaged margins.
But having been the target of a prominent shoplifting 'attack' by TikTok users last month at its Oxford Street store, it would be easy to think the FTSE 100-listed sportswear retailer will echo struggles reported by its high street rivals, ranging from Primark to Dicks Sporting Goods, which have been forced to up measures to protect 'shrinkage' increases.
This past week, analysts downgraded full-year margin guidance for Primark’s parent company and said they expect these costs to become an “ongoing feature”.
But broker Shore Capital believe this is unlikely to be the case for JD, pointing to smartly stocked inventories and the classic shoe retail trick of only presenting one of the pair.
“While theft remains a real challenge for retail, especially in the USA, [JD Sports] notes how ‘one needs to be a one-legged thief',” Shore Capital analysts said.
Those at Berenberg are also confident about JD’s future prospects and think the stock offers “extreme value”.
“JD is more than a retailer – it is a global brand dominating 'mindshare' of the generation-Z consumer, with impressive local and global social media engagement,” analysts at the German bank said, noting that the retail has around 66 million TikTok likes versus an average less than half that for sports brands and around five million for sports retail peers.
JD Sports shares hit an all-time high above 230p in 2021 and after more than halving at one point last year recovered to above 180p at the start of 2023 before drifting lower since to hover just over 140p lately.