Shake-up bears fruit at JD Sports

JD Sports owner John David Group today cheered investors with signs that a turnaround drive was shaping up the British business.

A good performance by its key sports division over the Christmas period helped lift like-for-like sales by 6% in the eight weeks to January 1.

The trading statement led many analysts to upgrade their forecasts for full year profits – despite heavy discounting of under-performing fashion ranges affecting margins. Shares rose 4% after the update.

The company has accelerated its store closure programme in recent months in a bid to offload under-performing sites acquired when it bought the 209-strong First Sport chain in 2002.

The wider group now has more than 330 stores after closing 15 in the first half of this financial year and plans to continue closures at a similar rate.

JD said trading at the sports arm had been “encouraging” since it reported first half results in October, as it reaped the rewards of the store closures.

Weaker comparatives last year also helped the company.

Executive chairman Peter Gill said: “The Christmas trading period has proven that our consumer offer and our strategy are stimulating a continued recovery in the group’s performance.”

Analyst Matthew McEachran at Investec Securities said signs of a turnaround were increasingly evident.

“Whilst a lot of hard work is still required in fashion, some of the changes to sport are now bearing fruit,” he said.