Market Reaction - JD Sports Fashion

Time Period Covered: 53 weeks to 3 February 2024

- JD Sports outperformed the sportswear market with significant sales growth and strategic progress, including opening 215 new JD stores.

- Anticipates profit before tax for FY24 to be in line with the guided range.

- Initial FY25 profit before tax guidance, pre-accounting adjustment, ranges from £900-980m.

- Trading for the new financial year has started in line with expectations, despite a challenging market environment.

- Detailed financial performance across regions with specific growth figures and operational highlights.

- Announced changes in accounting policy affecting profit before tax figures from FY25 onwards.

I am a little surprised at the movement in JD Sports, which rose 16.09%, but I didn't see much to be cheerful about. The CEO did not seem too upbeat, stating:

"The current trading environment remains challenging due to less product innovation and elevated promotional activity, especially online. We anticipate trading conditions to improve as we move through the year, helped by a busy sporting summer and softer comparatives with last year."

While they are projecting an initial FY25 profit before tax guidance, pre-accounting adjustment, ranging from £900-980m, this is still some distance away.

The company is trading at a current PE of 13, which is low for them. This low PE may be the reason behind such a strong rise, despite not much positive news from the company.