JD Sports confident of meeting profit expectations

In a statement ahead of its annual general meeting, the retailer said it had continued to achieve "encouraging" like-for-like sales growth in its core sports fashion in the UK and internationally.

JD pointed to a net increase of 29 new stores in the period to 29 June 2019.

Executive chairman Peter Cowgill said: "As expected, the emphasis has been on international development with a net 18 new stores to date across Europe (including the conversion of six former Chausport stores in France) and a net five new stores in the Asia Pacific region with additional stores in both Malaysia and Australia.

"We have now opened our sixth JD store in the United States after the conversion of the former Finish Line store at the Mall of America in Bloomington, Minnesota. These JD stores are also now complemented by a trading website which was launched in May. We remain encouraged by the developments in this market to date."

At 1100 BST, the shares were up 3.1% at 621p.

Peel Hunt said the update was "very good" as it upgraded its estimates on the stock "for the umpteenth time".

"We add £10m to our numbers today, which is conservative but who knows what sort of Black Friday & Christmas we’ll have given the political shenanigans. Not that the Brexit yawnfest seems to be impacting the average JD shopper anyway.

"A mid-teens PE for a company that is exporting its skills successfully, building relationships with the key brands and delivering rapid growth is too low."

The broker upped its price target on the buy-rated stock to 650p from 580p.

Shore Capital said the update was "reassuring".

"We continue to highlight that this is a business with real momentum noting the commentary that LFL growth continues both in the UK and internationally.The company has ridden the athleisure consumer trend well and the FY2019 results back in April highlighted the growth across the business."

"In terms of valuation JD trades on a forward one year (year to January 2020) price-to-earnings multiple of 18x and an EV/EBITDA multiple of 10.5x. Given the international growth prospects of the company, we believe it deserves to trade on a premium rating and reiterate our 'buy' rating. Today’s short statement should reassure investors that the group remains on track to deliver another year of good growth in revenues and earnings."