Sports kit-to-trainers purveyor JD Sports Fashion (JD.) jumps 5.9% (27.9p) to 504p as it says annual profits will smash even the most optimistic of market expectations. Confidence is rippling through the City sparking a swathe of analysts to upgrade forecasts after a stellar festive trading statement, one that surely confirms JD a Christmas winner.

The sports, fashion and outdoor brands seller, trading under fascias including JD, Scotts and Blacks, reveals like-for-like store sales surged 12% higher in the five weeks to 3 January. With same-store sales growth also running at 12% for the first 48 weeks, JD Sports expects profit before tax for the year to January will exceed £90 million, the top end of market expectations.

Web chart - JD Sports Fashion - Jan 2015

This reflects a knock-out festive performance from the core sports fascias, the profit growth and cash generation engine for JD Sports. Strong demand was seen in the UK and Europe, with JD benefiting from growing consumer appetite for branded athletic footwear. Significantly, the JD format has the support of leading sports brands Adidas (ADS:GR) and Nike (NKE:NYSE), underpinning exciting growth potential overseas.

US promotional import 'Black Friday' did bring forward sales, though JD Sports' discounts were at reasonably low levels. Well-documented warm weather in October and November hurt outdoor chains Millets and Blacks, though the onset of cooler climes provided a late boost.

Guided by executive chairman Peter Cowgill, JD Sports is outflanking many a retail rival, with this exceptional festive performance delivered against demanding prior year comparatives. Having announced doubled profits at the half-year stage (17 Sept), JD Sports then sold (25 Nov) its loss-making Bank Fashion business to turnaround specialist Hilco Capital for a nominal sum. The move was well-timed, as the chain was subsequently put into administration at the start of this year.

Issue Date: 16 Jan 2015