Retail star turn JD Sports Fashion (JD.) is winning another round of earnings upgrades after forecast-busting full year results (11 Apr). Encouragingly, the core JD brands are set fair for the future given a continuing boom in athletic inspired footwear and clothing.

Inflationary pressures are arising from Brexit but this retailer is going from strength to strength. The core Sports Fashion business delivered a third consecutive year of double digit store like-for-like growth last year and the international store roll-out is gathering pace. Market share in mainland Europe remains but small, an entry into Malaysia has been successful and a first JD store in Australia opens shortly.

In a major milestone, JD Sports’ Outdoors division is now in profit for the first time. However, November’s Go Outdoors acquisition remains under review by the Competition and Markets Authority (CMA). Frustratingly, the integration of this complementary out of town retailer has yet to begin. JD is obliged to run the business separately until the review completes.

We’re positive on JD Sports Fashion at 440.64p given its cash generation, relentless market share gains and the upside risk to forecasts. (JC)

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