JD Sports posts record half-year profits of £46.6m
Sports and outdoor retailer JD Sports shrugged off the high street gloom to post record half-year profits.
The Bury-based firm, which also owns Blacks and Millets, said underlying pre-tax profits leapt 83% to a better-than-forecast £46.6m in the 26 weeks to August 1, driven by 10% like-for-like sales growth at its sports shops for the second year in a row.
Analysts had expected interim profits of around £35m, after the FTSE 250 firm said in July that its full-year pre-tax profit this year would be about 10% ahead of City forecasts of around £110m. Shares lifted 2%.
The group, which runs more than 800 stores across the UK and Europe, said its sports shops performed strongly in an extremely competitive market.
It added that like a number of retailers, its earnings would be impacted by the introduction of the national living wage next year, but did not provide a more detailed update. This means the minimum wage will be set at £7.20 an hour for over-25s from April, forecast to rise to £9.35 by 2020.
During its interim period the firm opened its largest JD Sports store to date on Oxford Street, covering 22,000 square feet over three floors, and selling such brands as Nike, Adidas, Fred Perry and The North Face.
It opened 27 shops across Europe during the period, and plans to open a flagship store in Amsterdam in the autumn.
At its troubled outdoor stores the group said it reduced losses to £4.5m, from £5.6m a year ago, despite sector-wide heavy discounting of surplus autumn and winter ranges in the first quarter of the year.
Executive chairman Peter Cowgill said its group results were pleasing as they are “measured against particularly strong and challenging comparatives”.
But he warned: “In an extremely competitive market for sports fashion footwear across Europe, we must acknowledge that the levels of organic growth that we have seen over the last two years are unlikely to continue indefinitely.”
However, the firm said it was “encouraged” by its trading so far in its second half of the year.
Independent retail analyst Nick Bubb said the retailer had “smashed” through City forecasts.
Cantor Fitzgerald analyst Freddie George said the results were “significantly better than our expectations”, adding that he had upgraded JD Sports’ full-year pre-tax profit by 4.2% to £124m.
Last year the group disposed of its loss-making Bank fashion chain, which later went into administration.
