We're expecting a strong finish from JD Sports (JD.), which reports its full-year results next week. Our optimism is based on a couple of trading updates released over the past months: underlying sales in the core UK and Ireland sports and fashion categories grew by about 6 per cent over the 48 weeks to 4 January, helped by strong Christmas trading.
As a result, management expects adjusted pre-tax profit to be in line with market expectations of roughly £71m. Investec retail analyst Kate Calvert is looking for pre-tax profit of £69m and EPS of 103p and rates the shares a buy. "We believe the valuation remains undemanding and expect the shares to continue to re-rate as JD delivers on strategy," she says.
One thing we will be looking out for is evidence of an improvement in the Blacks and Milletts brands, which JD recently acquired and has been busy transforming following years of mismanagement. We also suspect fashion might have had a challenging time, given the ongoing intensity of competition on the high street.
