JD Sports Shares Plummet in Response to Bleak Performances of American Peers
JD Sports, a leading sportswear retailer in the UK, has experienced a sharp decline in its share price following disappointing performances from its American counterparts. The company saw its shares drop by 5.4% in a second consecutive day of heavy losses, with a total decline of 12% over two days.
The downward slide was prompted by negative news from US sporting goods retailers. Footlocker, a prominent trainer giant, reported a 30% decrease in shares after incurring losses in the three months leading up to July 29. The company also slashed its full-year profit forecasts and paused dividend payments to focus on other areas of its business.
JD Sports had already been impacted by a somber update from America’s largest sporting goods retailer, Dick’s Sporting Goods, which saw a nearly 25% plunge in shares due to the downward revision of sales forecasts and sluggish performance in its outdoor category.
These developments have raised concerns among investors, leading Bank of America to downgrade JD Sports’ rating from buy to neutral. The brokerage cited increased risks to sales and highlighted the likelihood of consumers prioritizing spending on travel and entertainment rather than sportswear.
JD Sports’ expansion efforts in the US have made it susceptible to updates from its American rivals, further intensifying the impact of these gloomy performances.
On a more positive note, property stocks in the UK rallied as hopes emerged that interest rates would not rise as much as previously anticipated. This development provided some relief to housebuilders and commercial property developers.
In a challenging economic climate, the London stock market experienced two consecutive days of gains. The FTSE 100 rose 0.7%, while the FTSE 250 increased by 1.1%. Utility stocks performed particularly well, with companies like Severn Trent, SSE, National Grid, and United Utilities registering gains.
In other news, Cohort, a company operating in the defense sector, received a boost after one of its businesses, tech firm SEA, secured a £17.5 million contract to provide an external communications system for a defense program. This positive development resulted in a 6.7% surge in Cohort’s shares.
Aviva, a leading insurer, witnessed one of its executives, Amanda Blanc, acquire over £100,000 worth of company shares. This move by Blanc, coupled with Aviva’s 1.2% rise in stock price, reflects a show of confidence in the company.
Building materials giant CRH received a vote of confidence ahead of its planned relisting in New York. Citigroup initiated coverage of CRH with a buy rating, stating that US investors may seek infrastructure stocks at bargain prices. CRH’s shares increased by 0.7%.
Disclaimer: The information provided in this article does not constitute financial advice. Readers are urged to do their own research and consult with professionals before making investment decisions.
