JD Sports soars on the stock market after improving its 2022 earnings forecast.

The British company announced on Wednesday that It expects to make an adjusted pre-tax profit of between 933 and 985 million pounds sterling (between 1.05 and 1.11 billion euros). after Revenue increased by 10% in the 22 weeks to December 31.. In the The last six weeks of the year, revenues rebounded 20%. compared to the same period last year.

“We feel very Encouraged by the performance of our premium sports products around the world.. In particular, our activities in North America, as expected, saw a strong recovery with growth of more than 20% in the second half. to date,” the Lancashire-based company said.

“On the other hand, our businesses in the UK and Republic of Ireland, Europe and Asia-Pacific maintained their momentum in the first half, both in stores and online, which is reassuring and demonstrates the resilience of our proposition and the enduring strength of our commitment to the multi-channel consumer,” they added.

Regis SchultzMr. Schultz, CEO of the company, underlined “the involvement and commitment of our teams during the busiest sales period”. ” Many of our stores and websites saw record sales. JD’s market-leading products and retail expertise have captured the imagination of customers around the world like never before. Our strategic focus on the international and digital expansion of our premium sports stores is underpinned by the continued strength of these businesses,” said the CEO of the UK business.

Furthermore, the company forecasts adjusted pre-tax profit of just over £1 billion for the 2024 financial year..

EXPERT EVALUATION

Victoria Scholar, chief investment officer at Interactive Investor, points out that the figures provided by JD Sports “demonstrate the strength of demand in the face of pressures from a softening consumer outlook and rising energy bills. ». “Sales rebounded in the second half, which JD Sports says will contribute to full-year earnings at the top of its guidance,” the report said.

“Its premium brands and North America contributed to this outperformance, underscoring the resilience of upper-income consumers to cost-of-living pressures. Equities have suffered over the past year, driven by macroeconomic headwinds and general equity market volatility, but… Today they are trading at the top end of the FTSE 100 index.“The academic adds.

Zainab Atiyyah, retail analyst at Third Bridge, said, believes the margins of the Lancashira business will “remain under pressure” for “some time”.as customers “give up discretionary purchases and ‘swap’ (buy things they already own at a lower price)”.. ” It’s necessary more promotional activities“, he says.

However, he points out that JD was presented with “a great opportunity for it to leverage its own brands and build its value proposition.”. “Average selling prices across the industry look set to rise in 2023 in response to rising input costs and consumers expecting to pay more,” he adds.

As well, Shore Capital gives a buy recommendation. on JD Sports, as he estimates that it is trading at a price/earnings ratio 11 times higher than its value. “We believe these valuation metrics are attractive for a global multi-channel retailer such as JD Sports. In our opinion, JD Sports remains the best-in-class retailer in our universe of general retailers.. The company is well managed, with excellent cash generation and tight inventory and cost control,” they explain.