While JD Sports has reported a record set of results, it must be noted that this financial period ended before the Ukraine crisis unfolded and inflation surged higher.
“Therefore, it is not representative of the current environment in which consumers are under considerable financial pressure and are losing confidence with regards to the economic outlook, which will curb their ability and willingness to keep spending at levels seen in 2021,” said AJ Bell’s Russ Mould.
“This headwind is clear to see in the retailer’s forward earnings guidance. After seeing pre-tax profit more than double in the past financial year, JD now expects no profit growth at all in the current year.
“To make matters worse, the company is still searching for a new leader after splitting with executive chairman and architect of the group’s success, Peter Cowgill. Fortunately, whoever it hires will inherit a strong business with fingers in many pies.
“JD Sports is more than premium trainers. It is now more involved in the biking space, capitalising on interest from those having a mid-life crisis and happy to splash several thousand pounds on the latest carbon frame road bike, as well a general trend for people to be healthier and do more exercise.
“It has also expanded its presence in the gym market where there is a large cross-over with its customer base for clothing, outdoor equipment and bikes.”