Advertise with fastmoving.co.za
 
 

JD Sports’s shares gain 77% in 2019 as the company rides millennials’ fondness for athleisure products.
JD Sports’s shares gain 77% in 2019 as the company rides millennials’ fondness for athleisure products.

JD Sports counters retail gloom with global expansion

INTERNATIONAL NEWS

By Tanishaa Nadkar and Shariq Khan - Jul 4th, 09:40

JD Sports, Britain’s biggest sportswear retailer, bucked retail sector gloom yet again, as it predicted full-year profit will meet expectations on strong sales from new stores and growing demand for gym wear by trendy youngsters. 

Shares of the owner of Footpatrol and Cloggs rose as much as 4.4% after the company also said it is seeing “encouraging” like-for-like sales growth in its core sports fashion business in the UK and other global markets.

JD Sports’s shares have gained 77% in 2019 as the company rides millennials’ fondness for athleisure products, helping it post estimate-beating annual earnings earlier in 2019.

The company has targeted millennials and Generation Z consumers — those born between the mid-1990s and the mid-2000s — who are driving the trend for athleisure, where gym clothes have become acceptable at work, school and on social occasions.

The company has also invested heavily in international expansion to drive growth. JD said it opened 29 new stores in the period to June 29, mainly in Europe, Asia-Pacific, and Australia.

For the full year, the company said it is confident in delivering annual headline pretax profit at least equal to the current consensus market expectations of £404.3m.

“We didn’t expect such high level of sales growth to persist, but it has,” Peel Hunt analysts said, calling the like-for-like growth highly impressive.

JD’s upbeat forecast comes against the background of the British retail sector’s ongoing struggles, mainly caused by weakening consumer spending amid uncertainty over Brexit, higher business costs and a shift to online shopping.

JD, which runs more than 2,400 stores that sell brands including Nike, Puma, and Adidas, has weathered the storm, thanks to its international footprint and a strong online presence.

In contrast, rival Sports Direct, majority owned by billionaire Mike Ashley, has struggled and recently failed to buy Debenhams and Findel.

“It’s likely they are going to pick up market share from other players,” Stifel Nicolaus analyst Eleonora Dani said but added that it will be harder for JD to keep up the pace of growth in a challenging retail environment.

The forecast comes ahead of the company’s annual general meeting, where shareholders will vote over the re-election of chair Peter Cowgill. Proxy advisory firm Pirc recommended that shareholders vote against his re-election.

Business Live 

Related News

Ackermans launches ‘Moms4Moms’ educational platform to give mothers a helping hand
16/09/2019 - 14:03
According to a 2017 Statistic South Africa report, 61% of South African children are raised by only their mothers. This reveals that the majority of South African women have to navigate single-parenthood, as well as being the sole provider for their families.

Rhodes Food Group's turnover rises amid healthy international growth
16/09/2019 - 11:14
The international turnover of Rhodes Food Group, which makes Bull Brand corned meat and Bisto gravies, rose 13.4% in the 10 months to end-July, boosted by a weaker rand and exports of fruit snacks to the US.

The changing UX and CX landscape
13/09/2019 - 16:16
An exceptional customer experience (CX) builds a foundation of loyalty and trust. Similarly, a positive user experience (UX) encourages brand connections with people wanting to come back for more. And yet, local organisations must learn to embrace these more effectively to differentiate themselves from their competitors.

The role of the stokvel in the organisation
13/09/2019 - 10:14
South Africans are well-known for their participation in stokvel saving schemes where members contribute a fixed monthly amount that is paid out to a specific member on a specified date. Nicol Myburgh, Head of the HR Business Unit at CRS Technologies, says employers can integrate these payments into existing processes to make it safer and more convenient for those members.

Improving your restaurant's ambience with these 5 tips
13/09/2019 - 09:44
Owning a restaurant is much more than ensuring that your guests are well-fed. It is about the experience you offer your customers. For instance, have you ever been to a restaurant where everything is just right? And by everything, we mean the decor, lighting, food, and music. This is the first impression you should aim to achieve as a restaurant owner.