UPDATE: JD Sports Says World Cup Drives Recent Sales Gains

9th Jun 2010 11:58

(Adds detail, analysts' comments, sahre price) By Hannah Benjamin Of DOW JONES NEWSWIRES LONDON (Dow Jones)--U.K. sportswear retailer JD Sports Fashion PLC (JD.LN) Wednesday said sales in its most recent eight weeks' trading have been boosted by the build-up to the soccer World Cup, which kicks off on Friday. In the eight weeks to June 5, JD's comparative retail sales from its U.K. and Irish shops grew 4.1%, an improvement on the 2% growth reported for the first 10 weeks of the period. The growth was driven by a 5.1% rise in comparable retail sales from its sportswear stores, offsetting a 1.2% fall in sales from its fashion stores, which include Bank, Size and Scotts. "The Sports Fascias performance continues to be satisfactory and has been positively influenced in recent weeks by the upcoming World Cup," the company said in its statement. The World Cup provides a good opportunity to drive sales and on its website JD has devoted an entire page to the tournament. Fans can buy replica shirts of every team playing in the month-long tournament, as well as things like retro shirts, balls and flags. Sales from JD's fashion stores have also started to improve, and over the 18 weeks to June 5 comparable sales from its Bank fashion stores returned to growth of 0.3%, having fallen 3.5% in the 10 weeks to April 10. Investec Securities analyst Katharine Wynne said JD faces tougher comparisons in its second half, but nonetheless raised her fiscal 2011 pretax profit forecast by 3% on the back of an expected increase in sports retail sales and improved fashion margins. She is now forecasting JD Sports to make a fiscal 2011 pretax profit of GBP73 million from GBP71 million previously and a fiscal 2012 pretax profit of GBP76 million from GBP75 million previously. She keeps a "buy" rating on the stock. FinnCap analyst David Stoddart, who also rates the stock a "buy", said he expects to raise his GBP70.6 million fiscal 2011 pretax profit forecast by around GBP4 million. JD Sports--which posts half-year results on Sept. 21--said margins continue to be encouraging, with particularly satisfactory progress in fashion fascias. The company, which bought French sports footwear company Chausport SA for EUR8 million last summer, said Chausport's good start to the year has continued. At 1043 GMT JD Sports shares were trading 1 pence, or 0.1%, lower at 780 pence, in a flat Dow Jones Smaller Companies index. Accendo Markets trader Charlie Menegatos told clients Wednesday that the market hasn't yet priced in the firm's consistent performance and delivery of upgrades. "We believe the strong management and financial strength of the group will drive the shares much higher in the weeks and months to come," he said. -By Hannah Benjamin, Dow Jones Newswires; 44-20-7842-9298; [email protected] (END) Dow Jones Newswires June 09, 2010 06:58 ET (10:58 GMT)