Jd Sports Fashion Share Discussion Threads

[psmith1110] 20/10/2017 13:21

Any specific reason for the weakness other than the general malaise surrounding retailers after the recent sales figures ?

[alphabeta4] 15/9/2017 17:43

I can understand your thinking Contrarian, Carney has seemed to like influencing the yield curve without actually following through. Having said that the markets have started to ignore him and instead looked at the comment in the minutes that 'a majority of the members believe some withdrawal of monetary stimulus was likely over the coming months'. We will have to see if they're more genuine than 'the unreliable boyfriend'!

[contrarian joe] 15/9/2017 12:52

Don't know how long that will continue Aiphabeta4,can't see rates going up any time soon,government trying to talk (the pound up to protect inflation),will the markets fall for it though,!might be wrong, it's how i see it.

[3rd eye] 15/9/2017 12:51

Broker note here on JD. J.D Sports. Looks VERY Bullish.

Peel Hunt.

JD’s H1 performance is ahead of expectations and we are
upgrading. Including online sales (now nearly 14% of JD’s sales),
LFL remains the envy of most retailers, and profit delivery is
strong, with core margins flat despite various headwinds. Go
Outdoors has started well within the JD stable and we expect
further strong progress from each silo in H2. The shares have
been wrongly derated due to concerns from the US and slowing
athleisure momentum. Today’s numbers show that there is
plenty more running in the JD legs yet and we expect a strong
bounce back from 13x PE.

£102.7m of PBT. We were forecasting around £93m, so a £100m+ result was a decent outcome against that number: it sets up a nice upgrade (essentially we are keeping our H2 forecast unchanged and just adding the £m beat to FY numbers). In-store LFL in the core UK JD business was 3% against an eye-wateringly tough comparative. In Europe, the LFL number was 7%, another fine effort given last year (Holland was the toughest market in this half, things were marginally more bearable in Germany). Both of these LFL numbers do not include online sales: they are now 13.7% of UK/Ireland sports fashion sales (up from 11.1%): had LFL been included online, it would have been 6% in the UK and 10% elsewhere. Both of which are striking numbers and on top of the material volume growth that we have seen in the last few years, it gives JD a very strong bargaining position with suppliers. The gross margin was down by just 30 bps in the JD fascia, a good effort given the headwinds, and the net margin was flat, despite the living wage being a factor again. All in all, it was a very strong showing from the core business and we expect continued in-store and online growth in H2, despite the tough comp again. Another 40 stores should open in the period and the pipeline of stores and good people to run them is very much intact.

Outdoors into profit. Blacks and Milletts’ performances improved, showing LFL growth and lower losses, and the contribution of Go Outdoors ensured that the silo was in the black. The business is starting to work as one: it’s early days but the buying teams and operations units have begun the discussion on how to move forward. It will be a while before the systems are conjoined, but JD’s increased scale in the space should bring about a stronger performance in time A £10m upgrade. It's not difficult to see how our upgrade could be too conservative. JD's trading form remains good across Europe , SUR Dutch losses will reduce in H2 and outdoors should make progress again. However, it's probably right to be a touch cautious given the wider economic background. We certainly don't think the trend towards athleisure is anywhere near played out, and the recent weakness means the shares can now be bought on an early teens multiple, which spells good value to us.

[alphabeta4] 15/9/2017 10:29

Strong move for £ vs $ good news for JD. Relieves some of that margin pressure.

[alphabeta4] 13/9/2017 18:07

Nice write up. Good to see sanity prevail of sorts. IMHO this has been unjustifibly downgraded by people focusing too much on the macro picture and not enough on the quality of the company.

[elliotset] 13/9/2017 08:13

Break threw 400p in no time

[contrarian joe] 12/9/2017 19:03

D Sports kicks off new upgrade cycle
By David Brenchley | Tue, 12th September 2017 - 14:06
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JD Sports kicks off new upgrade cycle
Shares in JD Sports Fashion (JD.) tumbled two months ago following a low-key trading update, prompting us to ask whether the 14% sell-off in shares from record highs was overdone. Now, the tracksuits-to-trainers chain has answered the question with cracking first-half trading numbers and bullish outlook.

While chairman Peter Cowgill said in that June update he was confident of hitting full-year 2017 targets, his update lacked the bells and whistles investors had come to expect. Combined with a perceived slowdown in UK consumer spending and the bear case was building.

Indeed, investors could have bought JD shares up for as little £3 at the end of August, a 10-month low. That's because interims released today were expected to see earnings momentum stall. It didn't. Instead, Cowgill boasted of yet another record first-half.

Pre-tax profit jumped by a third to £102.7 million in the 26 weeks ended 29 July on revenues up 41% to £1.37 billion. Earnings per share (EPS) jumped 36% to 8.09p. The weak pound increased import costs, crimping margins, although this had already been priced into expectations.

May's acquisition of Go Outdoors helped JD's Outdoor division deliver a positive first-half result for the first time ever, with an operating profit of £100,000 compared to a £2.3 million loss a year ago.

The second-half has started encouragingly, too, with sales at similar levels to those seen in the first six months. Full-year profits are now expected to be at the upper end of market expectations, we're told.

Cantor Fitzgerald's Mark Photiades now pencils in full-year pre-tax profit of £285 million, which would be 16% higher than 2016.



In truth, it should have been entirely predictable. Historically, JD coasts through the first half before upgrades kick in through the important winter months, including the key Christmas period. Panmure Gordon analyst Peter Smedley notes JD's profit split is typically weighted 65:35 towards H2.

Those shrewd enough to get in at 300p are sitting pretty. JD shares surged as much as 12% to 384p Tuesday, giving a maximum return of 28% in just a fortnight.

Brokers upped forecasts for 2018 and 2019 by 2%-5%, "potentially triggering a new wave of the powerful positive earnings momentum" that has driven the stock in recent years, according to Smedley.

Investors should, of course, understand the risks, among them an increasingly competitive 'athleisure' market including players like Nike/Adidas, Zalando/Amazon (AMZN) and ASOS (ASC)/boohoo (BOO).

However, consensus opinion is that the long-term bull case remains intact. JD continues its international expansion, with 40 new stores opened in the half-year and a similar number planned for the next six months. This, combined with a strengthened digital and multi-channel presence, should drive further revenue and operating profit margin growth, argues Smedley.

A forward price/earnings (PE) ratio of around 16 times for the year to January 2018, falling to 14.5 times in 2019, looks attractive for a company positioned to continue to deliver sustainable double-digit earnings growth for the foreseeable future.

Kate Calvert at Investec had already increased her price target in June to 455p. That now goes up again to 475p, implying potential upside of 28%. Photiades keeps his target at £5.

This article is for information and discussion purposes only and does not form a recommendation to invest or otherwise. The value of an investment may fall. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.

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Recent Features

[5chipper] 12/9/2017 18:03

Ok, thanks Alphabeta

[alphabeta4] 12/9/2017 17:13

Schipper the upper end of 268-290 is the pre tax so isn't the pe figure. The forward is around 13.5 cash adjusted when I checked earlier using this year's cash figure and cash should be around £100m more by the end of H2 from the guided capex figures given the H2 profit skew from the Christmas period (barring no acquisitions of course) which will reduce this further.

[martinc] 12/9/2017 14:24

sorry.. I misread it as PE, not p/ev because I was squinting at my phone...

[5chipper] 12/9/2017 14:23

M cap of 3.6b less cash of 200m to get ev of 3.4b

With profits forecast to be £290m for full year, taken from interim statement.

3.4 b / 290m = 11.7.

May have missed something obvious there as all figures off top of my head

[martinc] 12/9/2017 13:56

[I can't read..].

[5chipper] 12/9/2017 12:56

Great buy this was at 305p... still looks rather good value on a p/ev of 11ish with the growth on offer

[hawaly] 12/9/2017 12:34

Up right under the 200 MA...............

[villarich] 12/9/2017 10:33

Shame it couldn't hold its wad when 10% up

[valhamos] 12/9/2017 09:12

Story intact. Added at 355p

[hawaly] 09/9/2017 20:09

"JD Sports to ease jitters with sales jump"


"Despite the concerns about the health of the wider athleisurewear market, analysts still expect JD Sports’s half-year sales to top £1bn, an increase of 30pc.

The City is generally expecting pre-tax profits to have risen by more than 21pc to £94m. “A marked decline in the share price over the last quarter is unwarranted, in our view, with a perceived increase in possible competitive pressures from the likes of Amazon, as well as the likes of Asos and Sports Direct,” said George Mensah, analyst at Shore Capital.

“We see the company as one of the strongest plays within the retail sector, and see recent share price weakness as an opportunity for investors to buy stock.”"



GLA.

[firtashia] 29/8/2017 10:34

Added at 308. 700K traded this morning already, wonder if the sudden drop during the first half hour of trading was the final tranche of the overhang being cleared. BWDIK so will wait for results now before taking any further action.

[psmith1110] 25/8/2017 21:48

I've also bought more - JD have a huge warehouse near Rochdale which is currently being extended. They must be confident or this wouldn't be happening. I don't think their core customers will be deserting in droves, and remember the last results were forecast busting !

[fangsforthememory] 25/8/2017 14:12

I doubled up this morning @312, looks oversold to me.

[alphabeta4] 25/8/2017 11:08

I know when something drops everyone has a bit of a panic but looking at the fundamentals I'm not sure how much lower this can go. The cash adjusted forward pe is now around 12, Next is around 11.5 and there you've got 7% negative eps for this year and flat for 18-19. JD have already produced an in line statement for the first 5 months and are still growing their European stores with the EU seeing an upturn in GDP growth which should in turn help with retail sales. If c30% of the sales are to the EU then this would also help mitigate any UK weakness plus when these sales are converted there's an added bonus given the current exchange rate weakness. I know this is a two company sample but I would far rather have a business with net cash than net debt and the biggest risk here looks a growth slowdown whereas Next has questions around returning to growth full stop.

If the sales are in line then another avenue that could lead to price weakness could be a reduction in gross margin. I'd been cautious about this a few months ago so have some notes from where I went back and had a look across the accounts for the gross margin percentage for the last few years:

2017 48.9%, 2016 48.5%, 2015 48.6%, 2014 48.7%, 2013 48.5%.

So whilst it's not impossible in the last few years gross margin has been remarkably consistent whilst covering periods where there has also been some decent exchange rate volatility. The board have flagged previously this has been due to 'brand obsessed' customers which seems to come through in the figures.

Overall from where I'm standing this looks to be an over reaction leading to panic selling. IMHO there's an excellent risk:reward for the brave here and I'm happy to hold.

[james010] 24/8/2017 17:43

at 250 i would be interested but don't catch a falling knife imo

[hawaly] 24/8/2017 16:42

Anything with a large presence on the UK High Street is currently tainted.

Foot Locker in the US is suffering from a fall in sales of "Athletiwear" - there is probably a read across from this as well.