JD Sports Fashion PLC (LON:JD.) shares drifted lower on Friday as the 'athleisure' retailer stressed the importance of its overseas stores in determining results for the year as festive like-for-like (LFL) sales growth was merely described as “positive”.
The FTSE 100-listed firm, which had 1,630 shops in Europe, Asia and the US out of a total of 2,218 at the half-year point, said its international operations had shown the strongest positive trends over the period.
In what was the first trading update from the company since interims for the period ending 3 August, when LFL sales were up 12%, JD’s management said they were confident that headline profit before tax will be between £425mln and £433mln for the year to 1 February 2020.
“Given the increasing significance of our international businesses in the overall group result, and the fact that there is a differentiated timing of the post-Christmas sale period in a number of our key overseas markets, the ultimate outturn will reflect trading in these markets through the remainder of January,” JD said.
UK sales growth remained "firmly in positive territory" in-store, said analysts at Peel Hunt, with Europe in double digits on a like-for-like basis, "stellar performances that represent serious gains of market share", with an acceleration in LFL sales growth in the US from the 5% in the first half.
Feedback is also being awaited from the Competition & Markets Authority after the watchdog launched a full investigation of last year's acquisition of trainer retail chain Footasylum.
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After initially moving higher to a session peak of 849p, by late morning JD Sports shares had reversed lower, down 1.1% to 818.40p.
Peel Hunt analyst Jonathan Pritchard added £15mln to his profit forecasts for each of the next three years, adding: "Arguably most pleasing is the pick-up in LFL in the US, where JD is also happier about the refit programme than it has been."
Ian Forrest, investment research analyst at The Share Centre, said: “Today’s update underlines the advantage of having overseas operations which are performing well. There was little in the way of detail in the statement but the overall impression was positive and the market reacted with a small rise in the shares in early trading."
However, he added: "When the full-year figures are released in April the market will be looking hard at the UK performance given the downturn in sales seen widely across the high street."
The analyst concluded: "The company has a good track record of growth and overseas expansion into markets such as the US is paying off nicely, but much of that is already reflected in the share price.”
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