Member Info for Alessandro

Not to mention that Eric Williams, who "left to pursue other career opportunities" has yet to start a new role. I bet living on the dole is less of a headache than being the CFO for DEC.

Hi Franalex, I recall very well the collapse of NMC PLC, it was a company I was optimistic about, I believed it was operating well in a growing sector. Accounting shenanigans are so difficult to identify. DEC does not fill me with confidence, first and foremost the level of incompetence the board has demonstrated in several occasion. The CEO is also the founder, so do not expect Rusty to be removed or held accountable for the large number of U-turns and inaccuracies in reporting.

What seemed to be an over reaction is now here to stay for some time. The updated guidance expected for March can make things worse for the share price

I hope this slow sliding is not the prelude to a more pronounced drop

They kept paying 30% tax on my dividends for way much too long despite having signed the W8 form.

They refuse to help with the recovery of the difference, saying that they do not help with foreign tax agencies. Ridiculous. Barclays Smart Investor is a joke, a bank as big as Barclays cannot compete with "small" fish in the same trade. Not to mention the app sucks, online support is non-existing, and some shares are not even available to buy.

MAybe the best companies go unnoticed?

The 12 month performance doesn't matter really, still a company worth as much as JD in terms of market cap but making half as much profits, with more cash at hand and higher net asset.

Burberry slashed the outlook by 25% shares drop 7% (so far). JD lowered its figure by 10%, shares dropped 25-30%.

Burberry is a much weaker business. Their offering is much more niche and undiversified.

The positive is that it appears that what is perceived more "premium" and unnecessary has been deprioritized by shoppers, it is a general trend and not a specific problem concerning JD only.

The day you plant the seed is not the day you eat the fruit.

FALCONER-FLYER 10bn earnings?

Reg. Bigmac69's statement.

don't you find it strange how revenue did not increase considerably (maybe 20% higher) from 2020 to 2021 yet the profit jumped to almost twice as much. Is this just accounting work or something extraordinary happened with gross margins?

The difference from 2020 to 2021 is not so extraordinary if you look at statutory earnings, rather than the adjusted.

Any thoughts?

The share price is ridiculously low. The CEO should buy, if he doesn't it means he's either hiding something or he is broke.

PSK yes if you wait for a couple of years perhaps lol

'Outperform' with a target of 150p. Does this mean the view is for a downtrend in the athleisure sector and JD is expected to fare better than competitors? Does a forecast of 150p implies forecast earnings of £650mln with a PE of 12? That is quite a conservatives PE, retail apparel trades on an average of 14.. which means 150p equates £530mln forecast earnings. Just over half of the previous estimate of £1 billion PBT. How bad can it get for JD? This is absurdity to me... But I have been unpleasantly wrong a few times now!

I am reading at the trading update again and I cannot see anything particularly bleak:

Positives:

- Constant currency organic revenue growth was 6.0% with like-for-like growth of 1.8%.

- Full year organic revenue growth to be c.8%.

- The gross margin rate for the period is in line with last year - This is still very decent and I am afraid overlooked by the market.

Unclear:

- Reclassification of certain capital expenditures into operating expenses

- Previously announced dual running infrastructure costs.

Negatives:

- Lower interest income of £8m following the ISRG NCI acquisition- This is understandable, you cannot make interest gains on capital expended for an acquisition

- Higher promotional cost - However this is at discretion of the company. As the company solidifies its brand across geographies, the cost will normalize. Maybe the JD overdid with the advertising campaign this year.

The punishment JD took was too harsh. Next is now forecasting PBT slightly lower than JD but with a market cap 73% higher! Add in that JD has more room for growth than Next (in my opinion). That's how undervalued JD is.

This is an interesting read:

This year’s award for the first shopkeeper to cite the weather in its Christmas profits warning goes to JD Sports. Specifically, the group didn’t care for how mild it has been – not good for shifting fleeces – although the same temperatures didn’t seem to bother Next, which turned in its usual upgrades to forecasts.

So the story probably lies in the other factors mentioned by JD. The group blamed “more cautious consumer spending” and “an elevated level of promotional activity during the peak trading period”. Possible translation: more and more punters think the entire ‘athleisure’ industry – from big brands such as Nike and Adidas, to the likes of JD itself – had elevated prices to silly levels.

Who could blame them? When the retail price of the latest “essential” variation on an old line of Nike trainers is £175, more than a few would-be buyers may conclude that a purchase is actually inessential, or decide to wait until the product goes on sale.

...

Yet the 23% slump in the share price still looks rational. There is a new uncertainty here. Has the industry’s phenomenal ability to crank the fashion handle and maintain pricing power reached a natural ceiling for now? JD didn’t venture a forecast for the 2024-25 year. Very wise: the mood among athleisure consumers seems to have turned very suddenly.

https://www.theguardian.com/business/nils-pratley-on-finance/2024/jan/04/too-mild-for-fleeces-theres-more-than-that-to-jd-sports-profit-warning?ref=biztoc.com

Trends are fashion is cyclical, athleisure may have peaked and now people may be shifting towards more classy ("Next" kind of clothing) until we hit the next fashion cycle?

JD may have grown too fast, too soon, and set the bar too high. 2-3 years of stabilization may be necessary before we can see significant increase in earnings. That is my take anyway. A couple of days ago I didn't think I would be saying this today.

PE currently in the range 6-7. Adjusted profit before tax of about £1 billion, Market Cap of about £6 billions: 6/1=6

Now imagine what revenue would have been if JD did not open the 200 additional stores.

In the meantime Next shares are at an all time high. How the factors that affected JD did not affect Next?

Selling a company making almost £1 bilions PBT at £7 billion market cap. The stock market is the only place where when sales are on people flee the stores.

I added at 130.. way too early, who has a crystal ball though?