The City gives its view on JD Sports’ update and whether growing losses from Blacks will affect its share price.
Nick Bubb, independent analyst:
David Jeary, Investec Securities:
“This is a good trading performance, achieved against what has been a very difficult trading period for many apparel retailers, given the unhelpful weather. While interim profits will be adversely impacted by the front-end loading of overhead investment and Blacks’ operating loss, our full-year pre-tax profit forecast is unchanged. We would expect the shares to react positively in light of recent weakness and re-iterate our Buy recommendation.”
Matthew McEachran, Singer Capital Markets:
“The Blacks turnaround continues to be a focus, with ongoing negotiations to restructure the portfolio, although as expected first half losses will be sizeable. As previously indicated there is now likely to be a pause in the earnings trajectory of the group as it invests in its core businesses and recent acquisitions to create a solid platform for the next stage of growth. However, after recent weakness the shares may edge back up today.”