JD Sports Fashion PLC (LSE:JD.) has been tipped by RBC Capital Markets to be one of the “more resilient models” in European general retail, as companies across the continent wrestle with war and inflation.
The analysts point toward the company’s strong brand relationship and its appeal to younger shoppers where “sports fashion is a high priority purchase”.
JD also remains well-positioned to be a key global partner for big brands following on from Nike’s third-quarter trading update last week.
This is due to its “ability to offer access to a more cash-based urban customer,” as well as its analytics expertise across buying, merchandising and data analytics.
The broker adds that product flow will improve from May, with the Vietnamese factories re-opening for Nike, and Nike products accounting for roughly 40% of JD's offerings.
It therefore forecasts only single-digit increases in cost and selling prices, which should help it in times of rising inflation.
The sale of Footasylum is also underway after it was told to get rid of the company after breaching regulatory rules. Once this has been approved by the Competition and Markets Authority, it should be reflected in the full-year results in May.
RBC notes this should reassure investors that JD is on track for full-year profit before tax targets of over £900mln, with a bounce back in its European and US business is also expected in the second half of the year and will help towards the targets.