Business

Monday 19 August 2019

Stellar growth: JD Sports is UK's star performer on index

Thriving: Exclusive Nike and Adidas ranges like those modelled by Justin Bieber’s wife Hailey Baldwin in a campaign for JD Sports, have helped lift profits
Thriving: Exclusive Nike and Adidas ranges like those modelled by Justin Bieber’s wife Hailey Baldwin in a campaign for JD Sports, have helped lift profits

Sam Unsted

At a time when Britain's shopping streets are getting emptier, it's perhaps surprising that the FTSE All- Share's best-performing stock since the turn of the century is a humble sportswear seller.

JD Sports Fashion shares have risen by 7,444pc since January 1, 2000, hitting a record yesterday after the retailer reported profit ahead of expectations.

The stock is by far the best performer on the FTSE All-Share Index over that period, with second-placed Diploma, a building components and seals maker, having returned a comparatively measly 4,200pc.

Bookmaker Paddy Power Betfair is in third, up about 3,800pc.

JD's growth is in contrast with the UK retail sector's struggles.

Sales in the financial year just ended were £4.72bn (€5.46bn), the company said yesterday, up from about £171m (€198m) in 2000.

That's been mirrored by its market value, now clearly above £5bn compared with about £60m at the turn of the century.

The retailer's winning formula has been based around stocking exclusive ranges from the likes of Adidas and Nike, enabling it to attract growing numbers of fashion-savvy customers.

It's now extending the formula to the rest of the world, adding stores from Spain to Australia, while acquiring Finish Line in the US last year.

"Despite the challenging conditions on the high street, retailers who continue to thrive are those that have embraced change, invested in digital and listened to their customers to keep products fresh and desirable," Richard Lim, CEO at consultancy Retail Economics, wrote in a report.

"It's hard to think of such an impressive showing anywhere else in retail," Peel Hunt analyst Jonathan Pritchard said in a note.

He described the sports firm's sales and profit growth as "stellar", and sees no reason why it shouldn't continue.

Shore Capital analysts Greg Lawless and Clive Black also think there's more to come, saying the acquisition of Finish Line adds international growth potential to the equity story.

This means the shares remain attractive despite the rising multiples and deserve to trade at a premium to peers, they wrote.

Bloomberg

Irish Independent

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