JD Sports Fashion plc (LON:JD.) is expected to report strong full year results as it takes steps to expand across Europe and move on from the Rochdale warehouse scandal.
In a January trading update, the sports retailer said headline profit before tax in the year to end of February will exceed market expectations of £200mln by up to 15%.
The company said it achieved like-for-like (LFL) sales growth of 10% and had kept up the momentum in the second half.
“We expect to see continued strength in LFLs, though not necessarily at the 10% level reported in the first half (we model mid- to high single digits for fiscal year 2017),” Barclays said.
The bank added that progress on the group’s store roll-out strategy will be key. Barclays expects a store count of 1,057, including its Go Outdoors retail business.
However, it sees gross margins falling amid rising import costs due to a weaker pound following last June's Brexit vote.
JD Sports has managed to prove Mike Ashley wrong six years after the Sports Direct tycoon said he would crush its rival.
The company has flourished by targeting younger, more style-conscious customers while series of scandals over working practices have plagued Sports Direct.
However, last year footage by Channel 4 showed workers complaining that conditions at JD Sports’ distribution centre in Rochdale were "worse than a prison". JD Sports launched an investigation into working conditions at the centre, saying it was “deeply disappointed” by the report.
With the scandal largely behind it, JD Sports is considering merging its assets in Spain and Portugal with a division of Portuguese retailer, Sonae.
JD has entered into a memorandum of understanding with Sonae, which owns the Sport Zone business.
Any updates on this deal will be closely scrutinised by investors in the full year results.
CLICK HERE: For a daily round-up of Proactive news
Tuesday 11 April
Interim: Egdon Resources Plc (LON:EDR)
Final: Vedanta Resources PLC (LON:VED), JD Sports Fashion PLC (LON:JD.)
Trading Statement: Ramsdens Holdings(LON:RFX)