These FTSE 250 growth monsters have crushed the FTSE 100 over 2 years
Retailer JD Sports Fashion(LSE: JD) is an amazing growth story, and with the firm making solid progress with its international expansion strategy, there could be more to come for investors.
Since April 2016, the stock has advanced around 51%, and today's full-year results show impressive continuing operational advances. Revenue was 33% higher than a year ago and adjusted earnings per share shot up 32%. The directors expressed their confidence in the outlook by pushing up the total dividend 5%.
Winning market share
Like-for-like store sales increased 3% and like-for-like website traffic ballooned by more than 30%. The company's offering continues to resonate with customers, driving up market share. Meanwhile, the expansion programme abroad belts along. The firm rolled out a net 56 new JD fascia format stores across Europe during the year and opened nine in the Asia Pacific region including the first store in Australia, and the first in South Korea since the year-end.
Executive chairman Peter Cowgill said: "We are very encouraged by the progress that we are making internationally." He explained that JD's multichannel proposition drives "improved buying, merchandising and retail discipline." The financial and growth figures prove that the strategy is working.
Around 98% of operating profit came from the Sports Fashion Division and the worldwide store count is around 1,237. But there's a growing Outdoor division featuring acquired brand names such as Blacks, Millets, Go Outdoors and Ultimate Outdoors that delivered 2% of operating profit and which runs around 237 stores. The firm reported "encouraging performance" in the Outdoor business with EBITDA of £23m compared to £7m the year before after a first full year's contribution from the Go Outdoors acquisition.
JD may be consolidating the outdoor market in Britain but it is leading its charge abroad with the core sports fashion business. In one statistic, headline profit doubled from £100m to £200m over three years from January 2015. Meanwhile, the company ended the 2017 full year's trading with net cash on the balance sheet of almost £310m, up from around £214m the year before, even after funding nearly £100m of "additional" capital expenditure for growth. Cash is the acid test. This business is working and growing like mad. I think it's well worth your further research time now.
There's another fast-growing situation with Wizz Air Holdings(LSE: WIZZ), the UK-based airline company. Since April 2016 the stock is up around 82%, which easily beats returns from the FTSE 100 over the period, along with JD Sports Fashion.
Focused on growth
Wizz operates a low-cost airline service in Central and Eastern Europe and keeps delivering impressive growth numbers. In March, seating capacity increased almost 24% compared to the equivalent period the year before, with passenger numbers up just over 25%. The firm is focused on growth and, as well as regularly adding new routes, took recent delivery of five brand new Airbus A320 family aircraft, which increased the fleet to 93 aircraft in total. The company also expanded its Wizz Air Pilot Academy into the Romanian market to help support a drive to train 150 pilots a year.
I wouldn't buy and forget a holding in an airline company, but WIZZ is trading in a purple patch and growing fast. I think the firm is worth your consideration with a view to riding the growth phase.
Kevin Godbold has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.