JD Sports reports higher sales amid global expansion
JD Sports reports higher sales in its Q225 trading update with the company’s share price rising around 6% immediately after.
JD Sports reports higher sales growth in Q2 trading update
Athletic retailer JD Sports has announced increased sales globally following the opening of 85 additional stores this year. However, the company cautioned that the retail landscape remains "unpredictable."
In its second quarter (Q2) trading update for the 13 weeks to 3 August 2024, the British sports-fashion retailer said that like-for-like sales were up 2.4% compared to the same period last year and organic sales growth by 8.3% in Q2. Sales at stores open for at least one year, which does not include new stores, also grew.
Growth was powered by North America and Europe. In contrast, year-over-year (YoY) sales in the UK slipped 0.8%. The company cited a decline in both apparel and online sales as negatively impacting UK performance.
JD Sports attributed its stronger success largely to its "multi-brand" business model and the fact that sales were weaker last year, making growth comparisons more favourable.
CEO Regis Schultz emphasised that demand remains high for sneakers and casual clothing among the company's younger consumers. Additionally, the company enjoyed a boost from sales of replica jerseys and fan gear during the 2024 European football championship earlier this year. Schultz shared that sales of licensed products grew 35% over the previous Euro tournament and that the retailer sold nearly as many Scotland jerseys as England kits this year.
Since January, JD has brought its global store count to over 4,500 with 85 new store openings. Its acquisition of US athletic brand Hibbett for $1.1 billion further expands its American presence.
JD Sports’ management economic outlook
JD Sports management was careful to note that the "worldwide macroclimate remains unstable." Consequently, the company said it continues to be cautious in its outlook for the remainder of 2024.
Schultz clarified this largely relates to the competitive athletic retail landscape, which has compelled many brands and sellers, including JD, to offer more promotions and discounts than usual.
Still, JD Sports is maintaining its projected pretax profit of between £955 million and £1 billion for this fiscal year.
Analyst ratings for JD Sports
LSEG data & analytics shows a consensus analyst rating of ‘buy’ for JD Sports: 4 strong buy, 6 buy and 4 hold, with an upside target at 165.57 pence, a 22% rise from current levels (as of 22 August 2024).
Technical outlook on the JD Sports share price
The JD Sports’ share price, which despite Thursday’s 6% post-Q2 trading update rally, is down 15% year-to-date (YTD), is trading back towards the upper end of its February-to-August sideways trading range. The April and June peaks at 138.00p-to-138.55p represent the next technical upside target zone. It is part of a major resistance area going back to June-to-September 2023 when it acted as support for the share price. Because of inverse polarity, it now does the opposite, and is part of a key resistance area.
JD Sports weekly candlestick chart
Were the JD Sports share price to exceed its June peak at 138.55p on a weekly chart closing basis, the way would be opened for the March 2023 to August 2024 resistance line at 146.75p to be reached. Another potential upside target would be the 200-week simple moving average (SMA) at 152.93p.
The question is whether this time round the JD Sports share price can manage to break through its key resistance area or whether it is once again going to fail near it.
Potential slips may find support between the late June and early August highs at 132.60p to 130.90p as well as at Monday’s 130.35p high.
JD Sports daily candlestick chart
As long as Wednesday’s low at 122.50p underpins, immediate upside pressure should be maintained.
A medium-term bullish bias should be maintained while the May and July lows at 110.65p to 110.60p hold.
This information has been prepared by IG, a trading name of IG Markets Ltd and IG Markets South Africa Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.
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