UPDATE: Investors Cheer As JD Sports Unveils Healthy Christmas Sales
LONDON (Alliance News) - JD Sports Fashion PLC provided more reasons for its investors to be cheerful on Friday as the group upgraded its guidance for the full year on the back of a jump in sales over the Christmas period.
The FTSE 250-listed retailer said like-for-like sales rose 12% in the five weeks to January 3, noting the rise comes against strong comparative figures in the year-earlier period. As a result, cumulative like-for-like sales growth in the 48 weeks to January 3 is now at 12%, JD Sports said.
On the basis of this, the company said it is now confident it will post headline pretax profit for the year to January 31 above the top end of market expectations. At present, the top end of market expectations for the company's pretax profit is GBP90 million, according to JD Sports.
Shares in the company were up 6.7% to 508.00 pence on Friday morning, the best performer in the FTSE 250.
It marks another positive update from the retailer, which in September posted a surge in pretax profit for the first half, driven by a strong sales performance in its UK sportswear business.
Its pretax profit for the six months to August 3 rose to GBP16.5 million, up from GBP6.1 million a year earlier. Profit was pushed higher by a 27% rise in revenue to GBP721.5 million, up from GBP567.4 million in the year-earlier half, on strong sportswear sales which were given a fillip by strong sales in the lead up to the 2014 World Cup in Brazil.
JD Sports said Friday it will post its full-year results on April 15.
"I am delighted to be able to report that the great momentum I reported in the Sports fascias in all our territories earlier in the financial year has been maintained during the key Christmas period, particularly when measured against strong comparatives in prior years," said Executive Chairman Peter Cowgill.
JD struck a deal in the second half to sell off its loss-making fashion business Bank Fashion Ltd to a subsidiary of turnaround investor Hilco Capital Ltd. It did not provide any financial information on the sale, but said the disposal would result in a "substantial recovery of its intercompany loan".
Only six weeks after the November sale by JD, Bank Fashion fell into administration.
Analysts cheered JD's trading statement, with both Investec and Cantor Fitzgerald hiking their price targets for the retailer.
Investec raised its price target to 610 pence from 540 pence and maintained its Buy rating on the stock, describing the 12% like-for-like sales growth over Christmas as "exceptional".
Cantor echoed the positive sentiment, pushing its target price up to 550 pence from 520 pence and saying the trading update was well ahead of its forecast and market expectations on a "knock-out" performance for JD's Sports Retail arm.
By Sam Unsted; firstname.lastname@example.org; @SamUAtAlliance
Copyright 2015 Alliance News Limited. All Rights Reserved.