JD gap 6% higher after a solid trading update

Monday, 14th January 2019 08:53 - by Rajan Dhall

In their trading statement for the Christmas period, JD sports say significant progress on international development has been made. This company continues to buck the trend when it comes to the retail environment. Here are some of the highlights from the report:

Total sales growth for the cumulative 48-week period to 5 January 2019 of 15% across our global Sports Fashion fascias (excluding the recent acquisitions of Finish Line in the United States and Sport Zone in Iberia)

Total like for like sales growth in these fascias for the same 48-week period is now more than 5% including a consistently positive like for like performance across Black Friday and the Christmas period.

It is too early to draw any conclusions from the early performance of JD in the United States although we are encouraged by the developments to date

This initial performance has given us the confidence to extend our initial trial of the JD fascia with the conversion of up to 15 further Finish Line stores planned for the first half of 2019

Looking at the chart now this is a pretty significant gap higher. Overall, the future of this stock lies away from its own performance in my opinion. If the chancellor comes through on his pledge to tax online companies and provide subsidies for the high street then I think we move higher here. If not there are plenty of resistance levels in the way that could halt a move back to the highs of 539.4 although I would love them to get there. The main value area is around 355p and we are significantly above this but the macro environment does not support stocks. This week we have the key Brexit vote and global sentiment remains in the balance. Nevertheless, its a great result from a solid company but its a wait and see for me.

The Writer's views are their own, not a representation of London South East's. No advice is inferred or given. If you require financial advice, please seek an Independent Financial Adviser.