JD Sports Fashion PLC (LON:JD.) raised its annual profit forecast for the second time in four months following a strong performance in the second half.
The sportswear retailer, whose main rival is Mike Ashley’s Sports Direct International plc (LON:SPD), said it expects group profit before tax for the year to February 3 to reach £300mln, ahead of the £270mln to £295mln range expected by analysts. In September, the company had said it expects pre-tax profit to hit the top end of market expectations from £268mln to £290mln.
Online sales and overseas expansion boosts second half
In the second half, like-for-like sales growth remained at about 3% despite “challenging comparatives” as online sales increased and the group continued its overseas expansion.
"I am delighted to report that we have maintained our positive performance from the first half of the year which continues to demonstrate the capability and strength of our highly differentiated multichannel proposition,” said executive chairman Peter Cowgill.
Shares jumped 6.3% to 388p in morning trading.
Laith Khalaf, senior analyst at Hargreaves Lansdown, said: "Performance was no means as stellar as it has been in recent times, but then conditions are tough on the high street right now, thanks to the financial pressure on the UK consumer. JD Sports was probably insulated to some extent by its purchase of Go Outdoors, as the December cold snap prompted shoppers to stock up on winter warmers."
JD Sports down with the kids
Henry Croft, research analyst at Accendo Markets, said the company's stores appeal to younger generations, which has helped it outperform sector peers. The group's competitors are more geared towards a slightly older market, perhaps due to their increasingly cash-conscious disposition in the face of subdued wage growth and high levels of inflation, he said.
"JD’s strong online platform likely also helps appeal to the digital-age shopper, beating out high street stalwarts whose hard to navigate websites frequently feel like a smorgasbord of sellers," Croft said.
"Having over 850,000 Instagram followers is also sure to help the appeal to the smart phone generation."