JD Sports shares dropped on Wednesday despite releasing upbeat interim results as investors chose to fixate on the ongoing issues with Nike whose products make up a large proportion of JD’s sales.
JD Sports reported robust H1 2024 results, with revenue up 5.2% to £5.0bn and profit before tax and adjusting items rising 2.0% to £405.6m.
Investors will be pleased to see the sportswear giant maintains its full-year profit guidance of £955-1,035m, despite currency headwinds.
Looking to the future, JD’s expansion strategy remains aggressive, with 83 new JD stores opened in H1 and plans for around 200 new stores by year-end.
The company also completed the acquisition of Hibbett, significantly boosting its presence in North America, which now represents about 40% of pro-forma annualised group revenue.
“Following on from Nike’s disappointing numbers yesterday, JD Sports shares are also down this morning despite posting a profit ahead of estimates and reiterated guidance,” said Adam Vettese, market analyst at investment platform eToro.
“JD Sports has a multi-brand strategy and is continuing to roll out new stores and make acquisitions globally, yet Nike’s warning that the festive period may be littered with discounts could well have had some contagion effect this morning. Investors who have been in JD Sports for a while will be haunted by last year’s disappointing Christmas figures which saw shares plummet in January and will be looking to avoid a repeat performance this year.
“That said, conditions for the retailer should be better than 12 months ago with inflation easing up and potentially another rate cut in between now and the end of the year. Shares have steadily climbed this ear paring those January losses but are still some 20% from the 12 month high.”