JD Sports has upgraded its profit outlook following strong Christmas sales, and is stepping up its expansion in the US, where it has opened its first five stores.
Britain’s biggest sports retailer has been riding the athleisure boom – sportswear designed to be worn outside the gym – which has helped it avoid the collapse in fashion sales seen in other parts of the high street. Retailers are battling against rising rents and business rates, a shift to online shopping and waning consumer confidence.
JD said like-for-like sales rose more than 5% in the 48 weeks to 5 January, up from 3% in the first half, while total sales (including newly opened shops) surged 15%. It said like-for-like sales were “consistently” positive over the Black Friday and festive period.
JD, which also owns Blacks, Millets, Size and Go Outdoors, expects profits for the year to 2 February to hit the top end of analysts’ forecasts, which range from £325m to £352m, against £295m the previous year. It has 2,180 shops worldwide, including 390 in the UK and Ireland.
Shares in the Manchester-based company jumped more than 7% on the news.
The retailer credited its decision not to follow rivals into big price cuts, which kept gross profit margins at the previous year’s levels. Its smaller rival Footasylum, the footwear and hoodie chain, issued a profit warning last week, which it blamed on tough Christmas trading conditions that prompted it to slash prices more than expected.
Amy Higginbotham, retail analyst at GlobalData, said: “JD Sports has maintained its performance in spite of increased competition from clothing specialists and online [retailers] such as Gymshark and boohoo.com, who are expanding their athleisure ranges. Unlike Sports Direct, JD Sports’ multichannel and multibrand offer is strong.”
She said JD had managed to retain its appeal, especially among younger shoppers, by using tablets in stores and offering exclusive products from premium brands such as Nike and Adidas.
Neil Wilson, the chief market analyst at Markets.com, said: “To pull off solid like-for-likes without the kind of heavy discounting others have resorted to is impressive; indeed something of a miracle in the current environment. It just goes to show if you get the product offering and pricing right and tap into what consumers want, then there is still success to be found.”
JD opened its first five stores in the US after buying Finish Line, a US retailer, in September. It converted three Finish Line stores and opened two further JD shops in Houston, Chicago, Indianapolis, Columbus and Washington.
Its initial performance has encouraged JD to extend its trial of the JD fascia, and it plans to convert up to 15 further Finish Line stores to JD in the first half of this year.