JD Sports shares jump on better-than-expected sales

 

An upturn in the fortunes of outdoor clothing brands Millets and Blacks helped owner JD Sports deliver a well-received trading update today.

Shares rose 7 per cent as the group also announced like-for-like sales in its sports and fashion divisions for the 42 weeks until November 23 had kept pace with the 5.8 per cent improvement over the first half.

The company said that it was "pleased with very recent progress" in its outdoor brands.

An upturn in fortunes for the division comes after Millets dragged on the group's soaring profits in the first half - following its decision not to scrap the chain.

JD had planned to merge the business with Blacks after it bought both brands out of administration but earlier this year changed its mind and decided to keep Millets going, saving a number of stores.

In its latest update, the group cautioned that full-year results remained as usual dependent on the Christmas period but that it looked on course "to deliver earnings at least in line with current expectations".

Analysts said the statement implied that its loss-making fashion division - which includes the Bank and Scotts brands - continued to lose sales.

Bank has been undergoing an overhaul with former Asos executive Gwynn Milligan appointed as chief executive. Half-year figures had shown an improving picture for Scotts, though it was also loss-making.

Meanwhile, the JD Sports brand, which recorded a 7.5 per cent improvement in UK and Ireland like-for-like sales in the first half, appears to have continued to make progress.

Investec analyst Kate Calvert said: "While Christmas is a very important period, this statement reassures that the core business is performing well and that outdoor is improving."

She said the stock looked under-valued, particularly in light of the growth potential internationally and online.

Freddie George of Cantor Fitzgerald added: "The trading update in the first 16 weeks of the second half was markedly better than expected."

PA

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