JD Sports scores a Christmas cracker on a shopping pitch full of obstacles.
12 January 2022 – JD Sports scores a Christmas cracker on a shopping pitch full of obstacles.
Susannah Streeter, senior investment and markets analyst Hargreaves Lansdown
”’JD Sports has scored a Christmas cracker on a shopping pitch full of obstacles. Despite the supply chain crunch hitting some brands, a growing income squeeze and fears about the spread of omicron, it’s still notched up a stellar run. Like-for-like revenues grew 10% in the 22 weeks to January 1st, compared to the same period in 2020, with Black Friday and Christmas sales on a winning streak and margins holding up well. Its performance is testament to the pull of the brands it sells and its well-oiled online operations but the group has also benefited from a Biden bounce. A chunk of the stimulus cheques sent out in the US provided a £100 million kick to sales with many recipients splashing the cash on coveted products worn by their sports icons
The group’s headline profit before tax for the full year will now be significantly ahead of market expectations of £810 million, reaching £875 million. But ahead, it won’t be so easy to score an easy goal of growth of this level given that the effects of that stimulus boost are fading away and higher national insurance contributions in the UK will have to be absorbed. Adding into the challenging mix are ongoing supply chains issues constraining the availability of some products but the group has already shown its nimble performance in navigating that particular headwind. With sports and fashion fans showing a willingness to queue around the block to get their hands on the latest styles, sales should remain buoyant even as belts are tightened elsewhere.’’