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LONDON (Reuters) -JD Sports Fashion said on Wednesday it expected profit to exceed 1 billion pounds ($1.3 billion) for the first time this year as demand for trainers, joggers and hoodies from its younger shoppers keeps growing.
JD (NASDAQ:JD) has proved resilient to the cost-of-living crisis, with many of its young consumers not yet burdened by household bills, while its relationships with Nike (NYSE:NKE) and Adidas (OTC:ADDYY) means special access for its shoppers to the latest trends.
The group, which trades from 3,400 stores in 32 countries and online, is planning further expansion, after profit on Wednesday came in ahead of guidance for its last financial year, and as sales keep climbing.
For the first 13 weeks of its new year, JD posted organic sales growth of more than 15%.
CEO Régis Schultz outlined plans in February to spend up to 3 billion pounds to open as many as 1,750 stores over five years, and said his aim was to turn JD Sports into an athletic leisurewear “powerhouse”.
Last week, JD said it had agreed to buy France’s Groupe Courir for an enterprise value of 520 million euros. It has a growing exposure to the U.S. market and is also adding new stores in Italy, Germany and Spain.
Shares in the group have increased 30% so far this year, giving it a market capitalisation of 8.8 billion pounds, more than the market value of supermarket Sainsbury’s and Marks & Spencer (OTC:MAKSY) – two stalwarts of British retailing.
And analysts say it has further to run.
“We believe the growth potential is not reflected in the shares,” analysts at Peel Hunt said.
For its last financial year ending Jan 28, it reported profit before tax and exceptional items of 991.4 million, up from 947.2 million pounds in 2021-22.
For 2023-24 it forecast 1.03 billion pounds.
