Group revenue soared by 47.4% in the period to GBP2.72bn, including GBP725.2m of revenue from Finish Line and JD in the US

Group revenue soared by 47.4% in the period to GBP2.72bn, including GBP725.2m of revenue from Finish Line and JD in the US

JD Sports Fashion Plc has hailed "another period of significant progress" as group revenue surged by more than 47% in the first half of the year, boosted by the acquisition of Finish Line in the US.

In its interim trading statement for the 26 weeks to 3 August, JD Sports Fashion reported a 6.6% rise in pre-tax profit to GBP129.9m (US$160.21m) from GBP121.9m in the prior-year period. Operating profit surged 61% to GBP199.8m from GBP123.9m last year, while gross margin narrowed to 46.9% from 48.2% in the prior year. The 1.3% fall reflects the inclusion of the lower margin Finish Line business for the whole period, the company says.

Group revenue soared by 47.4% in the period to GBP2.72bn, including GBP725.2m of revenue from Finish Line and JD in the United States, which compares to the GBP180m reported for the seven-week period post-acquisition last year. 

Meanwhile, JD posted "strong" total like-for-like sales growth of 12% in the global Sports Fashion fascias, including more than 10% in the core UK and Ireland Sports businesses. These include JD, Size?, Footpatrol, Chausport, Sprinter and Sport Zone. 

Elsewhere, the group continues to develop in European markets with increased investment in marketing helping to drive double-digit growth in total like-for-like sales. Further afield, the combined JD businesses in the Asia Pacific region delivered total like-for-like growth of just under 10%, although the earlier timing of Chinese New Year relative to last year weighed on the performance of the business in Malaysia in the early part of the period. 

Meanwhile, at its Finish Line fascia in the US, operating profit before exceptional items on a comparable accounting basis was GBP34.7m, up from GBP4.8m in 2018 for the seven weeks post-acquisition. Like-for-like sales for the 26 week period across the combined Finish Line branded stores and website were up by 5%. JD completed its acquisition of the US athleticwear chain in June of last year in a deal worth US$558m.

Executive chairman Peter Cowgill said JD's like-for-like sales growth of more than 10% is "extremely encouraging" against the "widely reported retail challenges" in the UK.

He added: "JD also continues to gain momentum in Europe with a further double-digit increase in total like for like sales and a net increase of 23 stores in the period."

With regards to Brexit, JD warned the increased risk of a disorderly exit "could have potential adverse consequences on supply chains, tariffs, exchange rates and consumer demand."

Greg Lawless, an analyst at Shore Capital, highlights the "encouraging performance" from Finish Line in the US. "This bodes well for the future as the company broadens the appeal of the stores with clothing alongside the existing footwear ranges to harness the gross margin opportunity over time."