JD Sports earnings lookahead
Can new store openings drive a rebound in the JD Sports share price?
Growth overseas while UK business struggles
New store openings are driving organic sales growth for JD Sports in North America, but the extra weighting of these sales is dragging down the group's gross margin. However, this expansion has the potential to drive returns if the group can make headway in the US.
In the UK and Ireland, same-store sales dropped 3.2% in the fourth quarter (Q4) due to weaker apparel sales and JD Sports' low participation in promotional activities.
Profit outlook for the year
Looking ahead to fiscal 2025, JD Sports has provided initial pretax profit guidance of £900 million to £980 million under historic accounting methods. However, an accounting change will add £55 million to this guidance range.
Acquisition expands reach but provides distraction
The company is also proposing a £1.1 billion acquisition of Hibbett, which could accelerate growth if it receives regulatory approval, although the approval process may prove time-consuming and distracting for operational management.
Analyst ratings for JD Sports
JD Sports full-year results are expected to be announced on Friday 31th of May.
LSEG Data & Analytics show a consensus analyst rating of ‘buy’ for JD Sports with 4 strong buy, 6 buy and 4 hold – and a mean of estimates suggesting a long-term price target of 168.54 pence for the share, roughly 37% higher than the current price (as of 21 May 2024).
Technical outlook on the JD Sports share price
From a longer-term perspective the JD Sports share price continues to hover above its mid-January and February lows at 105.85p to 103.00p, a fall through which would engage the May-to-June 2022 lows at 100.95p to 98.94p. Below this support zone lies the October 2022 trough at 88.40p.
JD Sports Weekly Candlestick Chart
The JD Sports share price continues to range trade between its mid-January-to-April boundaries, between 103.00p and 138.00p, the break out of which will likely determine the medium-term trend.
JD Sports Daily Candlestick Chart
A rise and daily chart close above the 200-day simple moving average (SMA) at 131.71p and, more importantly, the 138.00p early-April high would probably lead to the January price gap to 155.05p getting filled. Further up lies the December peak at 177.75p.
An unexpected fall through and daily chart close below the 103.00p February low would put the May-to-June 2022 lows at 100.95p to 98.94p on the cards.
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