JD Sports update provides 'sense of relief', says Shore Capital

28th Mar 2024 09:20

(Sharecast News) - Shore Capital has reiterated its 'buy' rating for JD Sports after a reassuring trading update from the sportswear and footwear retailer, which has given the stock a boost as it recovers after a profit warning at the start of the year.

JD Sports issued a statement on Wednesday covering trading for the year to 3 February and gave markets its first guidance for the current year, targeting £900-980m in pre-tax profit, compared with the £915-935m guided range for the year just gone.

This was the first update since the first week of 2024 when it delivered a profit warning on the back of challenging conditions and higher promotional activity in the second half, causing shares to drop by a quarter.

"In all, after the disappointment of the 4 January warning it makes for grounded reading, no further weakening in the FY24 out-turn and, with the benefit of deeper appraisal, a firmer basis for FY25," the broker said.

"Missteps have understandably hit the stock rating, making for a material discount to global peers, and that's the upside potential here is guidance is grounded and delivered. Hence, we have a sense of relief and reiterate our 'buy' stance on JD stock."

After an 8.5% jump in the stock on Wednesday, shares were up a further 6.5% at 123.8p by 0937 GMT on Thursday.