JD Sports defies high street crisis to grow sales and profits

Wednesday 11th September 2019 06:30 BST

The sports fashion chain credited investment in its store and online offering for the performance across the six months to 3 August.

The wider group, which includes a gym chain and overseas store brands, recorded a 47% surge in revenues to £2.72bn with underlying profits growing by 37% to £235.2m.

On a pre-tax profit basis, which takes one-off costs into account, earnings were 6% higher at almost £130m.

JD Sports executive chairman Peter Cowgill said: "Against a backdrop of widely-reported retail challenges in the UK, it is extremely encouraging that JD has delivered like-for-like sales growth of more than 10% with an improved conversion reflecting consumers' increasingly positive reaction to our elevated multi-channel proposition where a unique and constantly evolving sports and fashion premium brand offer is presented in a vibrant retail theatre with innovative digital technology."

The results were consistent as far as investors were concerned.

Shares - up 83% in the year to date - were more than 4% higher when trading began on Tuesday and closed 9% higher.

The company said it was raising its dividend by 3.7% and was on track to deliver on the mid-range of full-year expectations despite the potential for disruption, should the UK leave the EU without a deal on 31 October.

JD said it was planning to open a warehouse in Belgium next year, earlier than initially planned, to assist its logistical operations.

It has proved another difficult year for the wider retail sector with fierce rival Sports Direct facing a series of challenges including a £605m tax claim - ironically from authorities in Belgium.

While JD acknowledged the struggles facing UK retailers, a combination of weak consumer confidence from political and economic uncertainty and higher costs, it said it had no current plans to reduce Its UK store portfolio, which includes Blacks and Go Outdoors.

It said: "We are very aware of the financial benefit that other retailers appear to get when they downsize their estates and, whilst we have no plans to fundamentally alter the size of the JD store network in the UK at this time, we continue to seek fairness and flexibility in the terms of our leases."

Commenting on the results, senior market analyst at City Index, Fiona Cincotta, said: "JD Sports' reputation for resilience has been reinforced by this excellent set of numbers.

"Sales are still rising at an impressive pace, allowing management to deliver yet another profit upgrade, notwithstanding some adjustments for new accounting standards.

"JD Sports is deftly side-stepping obstacles created by Brexit by offering customers the products they want, without having to slash prices to lure them into its stores."

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