Market watch: JD Sports still on track despite pre-tax profits slide

By MARTIN FLANAGAN
Published on 08/04/2012 00:00

TWO of the retail sector’s better performers, JD Sports Fashion and Dunelm, will be among those taking centre stage in the City reporting round this week.

However, when JD posts its annual profits on Thursday, it will show it is not immune from hard trading on the high street, with pre-tax profits expected to have fallen to about £72 million from £81.6m.

JD, which recently bought Blacks Leisure for £20m, is still set to tell the market that the underlying trading picture remains resilient. That is in stark contrast to rival JJB Sports, whose losses and trading problems see it in the process of yielding majority control to American sports retail giant, Dick’s Sporting Goods.

JD cheered the City with 0.1 per cent like-for-like sales growth in the five weeks to 7 January, following a 4 per cent fall in October and January. Analysts expect the recovery to have continued.

On Wednesday, Dunelm Group’s trading update is set to show it is still making sales strides despite the difficulties of the homewares sector.

Analysts say Dunelm benefits from having most of its stores at busier edge-of-town retail parks rather than the depressed high street. The homewares group has previously said that sales rose nearly 9 per cent to within a whisker of £300m in the six months to the end of December.

Less encouraging is Mothercare, which is expected to reveal a worsening sales trend on Thursday in its last update before new chief executive Simon Calver arrives from internet movie rental company LoveFilm. Mothercare saw same-floorspace sales drop 3 per cent in the UK in the 13 weeks to 7 January.

The shaky jobs market is likely to weigh on two of Britain’s largest staff recruiters, Michael Page and Hays, when they provide trading updates on Wednesday and Thursday respectively.

Both companies have recently warned that the Eurozone debt crisis and uncertainty in the banking sector have taken their toll.