Woozle Predicts JD Sports LFL Sales Beat

Our long/buy idea on JD Sports returned over 17% investment returns after the sportswear retailer outperformed market expectations.

On 16th April 2019, JD Sports management reported a 6% increase in LFL sales for the final quarter of the fiscal year ending in February 2019, exciting investors on promising results despite challenging conditions in the UK retail market.

 

Overall the group reported a 49% increase as it expanded store numbers in Europe and Asia and started to see positive gains from it’s £400 million acquisition of shoe store chain Finish Line last March. The company reported like-for-like sales growth of 6% from it’s sports fashion stores which came despite the widespread malaise impacting the UK retail space, the company’s core market.

 

The FT Reports JD Sports Results Cruising Ahead of Expectations Despite Retail Headwinds

 

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These results illustrated continued growth for the apparel retailer driven by higher customer demand surrounding new products, a successful merger with Finish Line, operational improvements, and waning competitor strength.

 

“JD is not immune to the widely reported challenges to physical retail in the UK with lower footfall on many high streets, malls and retail parks combined with cost challenges from increasing minimum wage rates and rises in business rates. Therefore, it is very pleasing that the core UK and Ireland sports fashion fascias, the most mature part of our group, have delivered a further increase in sales and profitability,” JD’s management commented.

 

Reuters data shows JD’s Shares up 17% in 3 months and over 25% since our long/buy recommendation in January 19.

 

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Prior to the release of JD’s annual results, Woozle’s team of primary researchers uncovered evidence of continued increases in LFL sales across the EU and UK, increased trends in ATV and foot traffic in comparison with this time last year, rising customer interest due to exciting product releases, lower prices in comparison with competitors, and operational adjustments that improved efficiency.

 

Woozle’s Long/Buy Idea on JD Released 4th April 2019

 

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Our clients were able to initiate or scale their long positions with enough time to capitalise on the more than 12% increase in share price in the weeks leading up to results and a 17% increase to date. JD Sports Fashion is still going from strength to strength as their share price is up 25% from our initial long/buy recommendation on the 29th of January.

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Woozle Predicts JD Sports LFL Sales Beat - Woozle Research