Bolt-on acquisition of DTLR adds scale and is highly complementary to JD’s existing US businesses from a geographical perspective. DTLR is a Baltimore, Maryland based hyperlocal (street based) athletics and apparel streetwear retailer, operating from 247 stores across 19 states. The stores are principally in the north and east of the US. DTLR’s attractions include strong connections to the black urban community with 70% of locations on the street, which differs from Finish Line (mall-based), JD (more cities/metro) & Shoe Palace (more Latino/Hispanic). JD now has a powerful multi-lever US growth platform, in our view. Total cash consideration of $495m seems fair. This valuation (1x historic sales) is lower than the price paid for Shoe Palace (1.6x historic sales), which reflects its lower profitability and potential growth outlook (see Figure 1 overleaf). Management guides to store base growth of c.5% p.a. versus 10% at Shoe Palace. The business will be part of the US ownership structure so JD Sports plc will own 80% and there will be a 20% minority. On new numbers, the US is forecast to account for 40% of FY22E EBIT (IAS17 basis) and the UK c.50%. FY22E/FY23E PBT upgraded by c.3.5%. The deal is due to complete in Q1 2020. The upgrade is less at the EPS level (1%-1.5%) given the minority and higher interest. We assume a similar level of sales/EBIT for FY22E as reported for the 52 weeks to 1 Feb 2020 pre-COVID (see Figure 2). Valuation (CY22E PE 17.6x) is undemanding and unreflective of JD’s strong cash generation and future growth prospects. We expect JD to emerge strongly post pandemic and resume sustainable double-digit growth, supported by both DTLR and Shoe Palace. JD is an exciting international roll-out story with a great opportunity to leverage established growth platforms in the US and Europe, backed by its highly profitable UK market position. BUY.