Market report

Next lifts guidance | JD Sports’ Europe expansion


High street fashion retailer Next raised its full-year guidance for the third time in four months after posting better-than-expected summer sales and seeing inflationary pressures ease. Its shares closed up 244p at 7,350p.

Pre-tax profits are forecast to come at £875m from previous guidance of £845m, with brand full price sales growth increased to 2.6% from 1.8%.

“Looking ahead to 2024/25 it is likely that inflationary pressures on selling prices and operating costs will continue to ease,” the company said as it unveiled a 4.8% rise in half-year profit to £420m on a 5.4% lift in group sales to £2.63bn.

“The uncomfortable transition of sales from retail to online appears to have slowed to a more manageable level, not least because less than 35% of our sales are now in shops.

“Alongside this change, retail property costs have dropped to levels more in line with current trading volumes.”

JD Sports Fashion

JD Sports Fashion – another retail outperformer – said underlying sales growth in its first half was up 12% as it confirmed that 200 stores will open in this financial period as it pushes ahead with expansion across Europe.

The company, which includes the Edinburgh-based Tiso chain of outdoor clothing and accessories, maintained its profit guidance for the year as a whole. Its shares ended the session 11.95p higher at 144.9p.

Régis Schultz, chief executive of JD Sports, said: “We have delivered a strong first half to our financial period with organic sales growth of 12% and profit on track for the full year. In line with our strategic plan, growth is being driven by our premium Sports Fashion business with an impressive performance in Europe (+27%) and North America (+15%), supported by a strong performance in our more mature UK market (+8%). This performance continued in the important back to school period.

“We have made good progress delivering on our strategic pillars, focusing on expanding the JD brand and we will open more than 200 JD stores worldwide in this financial period.

“We are going to accelerate JD brand growth in Europe through purchasing the non-controlling interest in both ISRG and MIG, and the acquisition of GAP stores in France.

“This is alongside the proposed acquisition of Courir in the region, which will, when completed, enhance the group’s existing portfolio of complementary concepts, bringing into the company its market-leading focus on the female customer.”

Market close

The FTSE 100 fell by 0.69%, or 53.03 points, lower to close at 7,678.62, despite the Bank of England holding interest rates for the first time since the end of 2021.

Sterling was also down as a result of the decision, dragging it to its lowest against the dollar since May.

This impacted on firms with overseas earnings, including miners whose backers responded to expectations of another US rate rise and a resurgent dollar. Antofagasta was down 46p to 1,409p, while Glencore fell 11.05p to 452.8p.

The Dow Jones industrial average fell 370.46 points or 1.1%.

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