Most of its physical store estate now closed JD has announced that all its UK stores were closed last night. Its US stores closed at the end of last week and Europe some 2 weeks ago. Effectively all its physical selling space is closed although its online business, which is typically c.20% of annual Group sales, and its stores in Asia (Malaysia, Thailand, Singapore, South Korea and Australia) are still trading. In keeping with its peers, management is looking at preserving cash via cost and capex savings. In the UK, it will be able to access the Coronavirus Job Retention scheme (INVe £18m per month), benefit from the business rates holiday (c.£60m) and the deferral of all HMRC payments (PAYE, National Insurance, tax and VAT). It is also in discussions with landlords with regards to the timing of future rent payments. Other European countries are offering similar schemes to the UK’s Job Retention scheme, though at different rates to the UK. The equivalent of business rates does not exist in Europe. In the US, it still remains unclear whether there will be similar support from the US Government with the retail industry actively lobbying for support. No issues with regards to liquidity – £1.25bn of headroom JD Sports has c.£1.25bn of debt headroom which is sufficient to support the business through this challenging period (see our cash burn scenario overleaf) and it is in one of the strongest positions of all the companies in our coverage universe. We were forecasting year-end net cash of £260m at end-January and understand from the company that net cash was c.£300m at the end of last week. Fortuitously, JD Sports increased its RCF to £700m at the end of last year and also has a $250m facility in the US. We make no change to FY21E/FY22E forecasts for the time being until the situation is clearer. Expect JD Sports to emerge strongly post this crisis We believe JD Sports will emerge strongly post this global pandemic, helped by its market-leading, multi-channel proposition in many of its markets. We would also expect the athleisure market to rebound quicker than most non-food categories and believe JD’s customer base should be less financially impacted as parents are likely to carry the financial burden. JD Sports was due to report its FY20 results on 15th April. Following the request from the FCA to observe a moratorium on the publication of results for at least 2 weeks, these will now be delayed to probably the second half of May. Continued overleaf