JD Sports defies high street gloom with robust sales growth

JD Sports has issued what it called a "robust" Christmas trading update as it rolls-out its clothing chain overseas.

The UK's largest sportswear retailer said like-for-like sales increased 5% in the 48 weeks ending 5 January, including the critical Christmas trading period.

The company said it was confident that full-year pre-tax profit will be at the upper end of market expectations, which currently ranges from £325m to £352m.

JD Sport, which agreed to buy one of America's biggest sports footwear and clothing retailers Finish Line for £396m in March, said it was "encouraged" by the opening of five JD stores in the US before the "key" holiday period.

It said it would convert up to 15 Finish Line stores with the JD branding in the first six months of 2019.

JD Sports executive chairman Peter Cowgill said: "I am pleased with the continued progress of the group both in terms of our performance in existing markets and the recent positive developments in the United States.

"We are confident that domestically and internationally, in stores and online, our unique and often exclusive sports fashion premium brand offer provides a solid foundation for future development."

Total (LSE: 524773.L - news) global sales rose 15% in the 48 weeks ending 5 January, excluding Finish Line and Sport Zone in Iberia.

JD Sports, which owns Blacks and Go Outdoors, is the latest high street retailer to issue a trading update after the crucial festive trading period.

It comes against a backdrop of the worst Christmas in a decade for retailers, according to the British Retail Consortium.

While Debenhams and Marks & Spencer (Frankfurt: 534418 - news) reported a fall in sales amid heavy discounting on the high street, Tesco (Frankfurt: 852647 - news) and John Lewis Partnership had a comparatively better festive trading period.

JD Sports said like-for-like sales across Black Friday and the Christmas period were "consistently positive."

"Given the well-publicised challenges within the wider UK retail market, we are pleased with this trading result which further demonstrates the robust foundations of our dynamic multibrand multichannel proposition across our core market and our capacity for further growth across an expanding geographical reach," the company said.

Greg Lawless, analyst at Shore Capital, said: "There will not be many UK retailers showing earnings upgrades this January, in our view."

"JD remains a tightly managed company with good cash generation, international expansion and good growth prospects.

"The shares have fallen 11% over the last three months and with this good news in tow we reiterate our BUY rating highlighting the growth-opportunities both internationally and in the UK that the group can harness plus scope for rating expansion."

The company's stock rose 6.4% by the close of trading of Monday.