22 August 2024
If you are covering JD Sports’ latest financial results, please find below a comment from Mamta Valechha, consumer discretionary analyst at Quilter Cheviot:
“JD Sports’ latest trading update points to a quarter of improved activity in the three months to August, as guided by management. Organic sales grew 8.3%, as JD Sports benefitted from easier comparisons and the summer of sports with the Euros and Olympics dominating the calendar. This will have more than offset some of the bad weather we have seen this summer.
“JD Sports is performing well across all regions, with North America the strongest of the lot. It is here where we should see further growth following the acquisition of Hibbett, enhancing JD Sports’ exposure in the South-East and Mid-West of the US. This deal has been completed ahead of schedule and is highly complementary to the JD Sports business.
“However, most importantly, management reiterated its full year guidance of 6-9% organic growth, highlighting that while JD Sports has been hit earlier in the year with weaker consumer spending, it is likely to bounce back due to innovation and the Hibbett deal bringing growth to the bottom line.
“Its valuation remains undemanding, especially when you consider its previous highs. The share price does not currently reflect the strength of JD’s market position and future growth potentials. To see a re-rating investors need a bit of reassurance about the Nike turnaround, but hopefully new innovation and exciting product lines in the second half of the year should keep growth on the agenda.”
