Citi starts JD Sports at ‘buy’

The bank said the US remains the largest sportswear market globally, but Asia-Pacific represents the largest growth opportunity.

"In China, we believe international brands can start to regain share from domestic brands in 2024, supporting growth despite the weaker macro (including Adidas, consistent with early signs from Citi’s Proprietary China survey)," it said.

“We expect Adidas (buy) to start turning around its Chinese market share from 2024. Puma’s (neutral) focus is on repositioning its US product to achieve more full-price sales, and improving its Chinese market share.

"We expect this to be a challenge given Nike and Adidas’ larger marketing budgets, their refocus on wholesale and Puma’s more marginal position in performance sports."

As far as JD Sports is concerned, Citi said it sees "a significant opportunity" for the retailer "to deploy capital, generating returns above its weighted average cost of capital, with cash generation supported by working capital control".

At 0915 GMT, the shares were up 1.3% at 133.05p.