As fancy dresses and suits were shelved last year in favour of comfy working-from-home wear, tracksuit retailer JD Sports saw sales boom. Even th
As fancy dresses and suits were shelved last year in favour of comfy working-from-home wear, tracksuit retailer JD Sports saw sales boom.
Even though many of its bricks-and-mortar stores around the world were closed, the chain said revenues were up 5 per cent in the 22 weeks to January 2 as customers flocked to its online shop.
Profits for the full year to January 30 will be at least £400m, the company added, well above current market expectations of £295m. And while JD sounded a note of caution for the year ahead, saying that there were ‘significant challenges’ presented by having to open and close stores as lockdowns were lifted and re-imposed, the firm said profits over the next year should rise by between 5 per cent and 10 per cent.
Russ Mould, investment director at AJ Bell, said: ‘JD Sports’ online channel has delivered and then some, both in the UK and across the Atlantic. The company has also mastered the basics of retail, it is good at managing stock and costs, and crucially it keeps the cash flowing in.
‘JD Sports has a very clear idea about who its customer is and what they want – namely trainers and so-called athleisure gear which can be worn for working out and socialising (in more normal times) as well as hanging out at home.’
Mould added that investors would likely be relieved that JD, run by executive chairman Peter Cowgill, had not taken on the added distraction of buying bust department store Debenhams.
Shares in JD climbed 3.8 per cent, or 32.4p, to 883.2p.
The gains made JD the largest riser on the FTSE100, as the index slipped 1.1 per cent, or 74.8 points, to 6798.48 points.
Following an enthusiastic start to the year, traders appeared to be sobered by Prime Minister Boris Johnson’s warning that Britain was in a ‘race against time’ to roll out vaccines.
M&G weighed on the index, slipping by 1 per cent, or 2p, to 196.55p as it said chairman Mike Evans had taken time off due to a stress-related illness.
Smith & Nephew dragged the Footsie down further, warning sales of medical devices had plummeted due to Covid.
In a stark indication of just how many operations have been postponed because of the pandemic, Smith said its revenue slipped by 7 per cent in the final three months of 2020. The firm, which specialises in joint replacements, expects full year revenue to take a 12 per cent hit.
Shares fell by 2.6 per cent, or 42.5p, to 1577p yesterday.
However, Abcam, another medical firm which creates antibodies used for drug development, saw a return to growth in the final six months of 2020. The firm, one of the largest listed on London’s junior stock market Aim, said revenue lifted to £147.5m from £138.2m as laboratories returned to work.
Shares yesterday climbed 6.1 per cent, or 89p, to 1556p.
The FTSE250 index of mid-sized companies was also weighed down by virus fears, and slid by 1.4 per cent, or 288.13 points, to 20776.13 points.
Cruise firm Carnival is still floundering amid travel restrictions, as Redburn analyst Alex Brignall said: ‘Visibility for the industry is still very low.’ For the three months ending November 30, Carnival reported a £1.6billion loss.
It added that it had slightly improved the rate at which it was burning through cash, but shares still fell 3 per cent, or 40p, to 1283p.
At the smaller end of the market, Stobart Group was putting its past behind it as the firm announced a name-change to Esken. The new title is old English for ascend, climb or rise – and shares in the Southend Airport owner obliged, lifting 6.4 per cent, or 1.95p, to 32.6p.