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JD Sports Fashion raised its annual profit forecast for the second time in four months on Wednesday as shoppers splashed out on sportswear during the holidays and US consumers spent their stimulus cheques on the latest trends.
Britain’s biggest sportswear retailer, which has expanded in the United States during the pandemic with the purchase of streetwear retailer DTLR Villa and Shoe Palace, shrugged off supply chain disruptions and new Covid-19 restrictions.
“JD Sports has scored a Christmas cracker on a shopping pitch full of obstacles,” said Hargreaves Lansdown analyst Susannah Streeter.
“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.”
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JD Sports expects headline pretax profit of at least £875 million ($1.2 billion) for the year to Jan. 29, ahead of current market expectations of £810 million. It had previously forecast profit of at least £750 million.
Shares in the FTSE 100 company rose as much as 4.8 percent, before reversing to trade down 1.7 percent by 09:15 am GMT as it also said earnings for the year ended January 2023 would be in line with the current year and “revert more to historic norms.”
JD Sports, which has been embroiled in a lengthy tussle with Britain’s antitrust watchdog over its purchase of smaller rival Footasylum, has seen demand rise since lockdowns were eased and people started visiting its stores again.
Like-for-like revenue for the 22-weeks to Jan. 1 was up 10 percent, it said, without giving details on top-selling lines.
It said the US government’s fiscal stimulus in the first half of 2021 might have contributed up to £100 million to its annual earnings.
By Muhammed Husain and Yadarisa Shabong; Editors: Subhranshu Sahu and Mark Potter
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