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JD Sports bucks the retail trend and runs up a record annual profit JD Sports bucks retail trend and runs up a record annual profit
(about 5 hours later)
JD Sports bucked the trend on Britain’s struggling high streets with record annual profits as the retailer capitalised on rising consumer demand for sports fashion and pressed ahead with expansion in the US. Shares in JD Sports soared to a record high as the retailer unveiled a leap in profits despite the gloom on Britain’s struggling high streets.
Pretax profits jumped 15% to £340m and like-for-like sales were up 6% in the year to 2 February, making it a standout performer at a time when some of the biggest names in retail are being forced to close stores amid rising costs and a shift to online spending. Profits jumped 15% to £340m and like-for-like sales – which exclude gains from new shopfloor space – were up 6% in the year to 2 February, making JD a standout performer when some of the biggest names in retail are being forced to close stores amid rising costs and a shift to online spending.
Shares in JD Sports rose 5% to a record high of 559p. With a market value of more than £5bn, JD Sports easily dwarfs rival Sports Direct which is valued at about £1.6bn. It is also bigger than Marks & Spencer at £4.5bn, and puts it in contention for entry into the FTSE 100 at the next quarterly reshuffle. The shares climbed more than 8% to a record high of 576p. With a stock market value of more than £5.5bn, JD dwarfs rival Sports Direct, which is valued at about £1.6bn. It is also more valuable than Marks & Spencer at £4.5bn, and could be promoted to the FTSE 100 at the next quarterly reshuffle.
Peter Cowgill, executive chairman, said JD “has the necessary agility to continue to exceed consumer expectations and prosper in an increasing number of international markets”. The retailer, which also owns outdoor brands and is expanding overseas, is benefiting from the athleisure trend, with people wearing sportswear as fashion and not just for sport. The group’s chairman, Peter Cowgill, said JD had also gained from the popularity of chunky footwear, particularly among women. Celebrities including Kylie Jenner – the world’s youngest billionaire – have driven demand for chunky trainers, traditionally considered to be “dad shoes”.
The retailer is benefiting from the so-called “athleisure” trend, with people wearing sportswear as a fashion choice and not necessarily to do sport. JD Sports has also embarked on major expansion plans both in the UK and overseas, notably in the US where it paid £400m for Finish Line, one of America’s biggest sports footwear and clothing retailers. It has already converted four Finish Line stores to JD stores, and opened a new one in a shopping centre in Houston. Last year JD Sports paid £400m for Finish Line, one of the biggest sports footwear and clothing retailers in the US. It has already converted four Finish Line stores to JD stores, and opened a new one in a shopping centre in Houston.
Russ Mould, investment director at AJ Bell, said: “JD is living proof that parts of the retail sector is alive and well. Sales continue to soar as it has found the perfect ingredients to keep the tills ringing. Russ Mould, the investment director at UK broker AJ Bell, said: “JD is living proof that parts of the retail sector is alive and well. Sales continue to soar as it has found the perfect ingredients to keep the tills ringing.
“It is engaging with customers by offering exclusive products and staying abreast of constantly changing fashion trends. It is also recognising the hard work of staff and giving them interesting career development opportunities thanks to its increasing global scale.” “It is offering exclusive products and staying abreast of constantly changing fashion trends.”
JD is in the process of buying Footasylum, the struggling footwear and hoodie chain, for £90m, which it said would bring “operational and strategic benefits”. It said Footasylum was a complementary business, targeting a slightly older customer. JD is also in the process of buying Footasylum, the struggling footwear and hoodie chain, for £90m. It said Footasylum was a complementary business, targeting a slightly older customer.
The group said like-for-like sales at its outdoor business, which includes Blacks and Go Outdoors, were “marginally positive” over the year despite the prolonged summer heatwave and unusually mild autumn which hit sales of jackets and waterproof items. The group said like-for-like sales at its outdoor business, which includes Blacks and Go Outdoors, were marginally positive over the year despite the prolonged summer heatwave and unusually mild autumn, which hit sales of jackets and waterproof items.
Cowgill said JD was not immune to the problems facing UK store chains, “with lower footfall on many high streets, malls and retail parks combined with cost challenges from increasing minimum wage rates and rises in business rates”.
Therefore, he added: “It is very pleasing that the core UK and Ireland sports fashion [shops], the most mature part of our group, have delivered a further increase in sales and profitability.”
JD Sports FashionJD Sports Fashion
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