The JD Sports share price rose by more than 2% on Friday, becoming the best performing FTSE 100 stock. The shares are trading at 1,065p, which is about 7.7% above the lowest level this month. The stock has jumped by more than 26% this year.
Why is JD rising?
JD Sports Fashion has become one of the best performers this year. This is mostly because demand for sporting goods has jumped substantially as the reopening continues. In the most recent report, the company said that its revenue jumped to more than 3.8 billion pounds in the first six months of the year.
That was a substantial increase from the previous period revenue of 2.55 billion pounds. Its profit before tax rose to more than 439 million pounds while its adjusted earnings per share rose to 29.16p. This makes JD one of the most profitable retailers in the UK. The company also boosted its forward guidance.
The JD Sports share price is rising on Friday after the company made a major acquisition. The firm acquired a 80% stake of Cosmos Sports. The details of this acquisition was not made public.
Cosmos was started in 1982 and has 57 stores in Greece and Cyprus. As such, it is part of the company’s plans to expand its business in Europe. The acquisition comes a few months after the company acquired Marketing Investing Group and DTLR in a $495 million deal.
JD Sports share price forecast
The JD Sports share price has been under pressure this month even after the company published strong results. This performance is mostly because of the rising fear that the fashion industry is facing significant cost increase. Companies like Asos and Boohoo have already downgraded their profitability guidance.
The stock is trading at 1,063, which is about 8.28% below its highest level this year. The stock remains being supported by the 25-day and 50-day moving averages. The price is also above the upper side of the ascending wedge pattern.
Therefore, despite the sell-off, I suspect that the JD share price will soon bounce back as bulls attempt to retest the YTD high.
