The way the ( ) share price reacted to the company’s results for the 26 weeks to 3 August 2024 (HY25), is a reminder that . On 2 October, the retailer’s stock fell 6%. That was the day on which the self-styled ‘King of Trainers’ beat analysts’ expectations.
And said that it expects to report a full-year adjusted profit before tax of £955m-£1,035m. Admittedly this is a wide range, but even at the lower end it would be a 4.1% improvement on last year’s results.
The market’s reaction was particularly puzzling given that its trading update on 22 August contained the same earnings forecast, yet its shares rose 10.6% on the news! This inexplicable response illustrates that short-term price movements are impossible to predict. However, looking over a longer period, a quality company that’s growing its revenue and earnings should deliver strong share price growth.
And I think JD Sports is an excellent company. That’s why I decided to invest in August. Reasons to buy Spending on fashion is closely correlated with wider economic conditions.
Most major economies are expected to grow over the next couple of years which should help boost disposable incomes. Also, with the group’s recent purchase of Hibbett (US) and its planned (subject to regulatory approval) takeover of Courir (France), it’s likely to be less reliant on the British economy than previously. These two sports chains have nearly 1,500 stores between them.
And despite the reaction of other investors, I.
