JD Sports shares surge to record high after profit jumps
By Rahul B
(Reuters) - Shares in Britain's JD Sports Fashion Plc climbed to a record high after strong demand for leisure clothing helped to drive a 55 percent rise in headline annual pretax profit, its biggest increase in eight years.
Shares in the company traded 11 percent higher at 453 pence by 0950 GMT, scaling new peaks and taking the gains for the year so far to more than 40 percent. The company's market valuation now exceeds 4 billion pounds.
JD Sports has exploited growing demand for branded sports shoes and clothes to overtake Sports Direct as the country's biggest sportswear retailer by market value, although both companies have come under fire over poor working conditions.
The share price rise came despite some cautious noises from the company about rising inflation.
"Inflation is rising above the rate of income increases and the way the pound has moved since the Brexit vote, I think there is still a bit of inflation to move in, but we think we are quite high up in consumer's shopping priority," Chief Financial Officer Brian Small told Reuters.
"We need to acknowledge that the consumer might be slightly harder pressed in this Christmas than they were in last Christmas," Small added.
JD Sports has the majority of its shops in Britain but added 54 stores to its portfolio in mainland Europe and said that first JD store in Australia is due to open shortly.
In Britain, it sell brands such as Superdry, Nike, The North Face, Adidas and many others through its JD shops. The company also offers a number of exclusive items from Nike and Adidas under the "Only At JD" range.
Like-for-like store sales at its core sports fashion business rose 10 percent although the company said it was "unreasonable" to growth to be maintained at this level.
Headline profit before tax and exceptional items rose to a record 244.8 million pounds from 157.1 million pounds a year ago.
Analysts welcomed the figures.
"We remain bullish on the company as we believe it is one of the strongest plays in the retail sector," said George Mensah of Shore Capital, who has a "Buy" rating on the stock.
(Reporting by Rahul B in Bengaluru; editing by Jason Neely/Keith Weir)
