JD Sports Fashion PLC (LSE:JD.), Adidas and Puma all benefitted as investors read across from a strong trading update from rival Nike overnight.
UK-listed JD Sports was one of the top blue-chip risers, adding 5%, though more direct competitors Adidas, up 7%, and Puma, up 6.5%, did even better.
Eugene, Oregon-based Nike said in the three months to August 31, the financial first quarter, revenue rose 2% to US$12.9 billion from US$12.6 billion the year prior, but net income of US$1.45 billion was down 1% from US$1.47 billion.
Revenue was a touch below Street expectations, held back by a fall in North America, but earnings were much better than hoped.
Peel Hunt pointed out within the results, EMEA was one of the better-performing regions (N America saw sales fall but in line with hopes, China was a sales miss).
“Of possibly the most significance was that inventory was down by 10%, which may allay fears of a lot of discounting ahead, especially in N America,” the broker said.
Peel Hunt also noted there "was a positive 'shout out' to JD as a key partner during the call”.
JPMorgan saw the read across to underlying trends in the sector as overall positive, with better-than-expected demand in North America, a solid performance in EMEA and expansion in gross margins.
The bank said it was encouraged by the fact that the update implies less of a deceleration in the US than previously expected and this points to potential upgrades in the North America region.
Back-to-school, something highlighted by JD recently, helped US sales while football, fitness and womenswear did well in Europe. Sportswear demand picked up in China as Covid restrictions eased.