JD Sports Fashion Plc has announced a 19% jump in half-year pre-tax profits to GBP129.9m (US$169.2m), supported by like-for-like sales growth and development of its multichannel “premium” offer.
Profit for the 26 weeks to 4 August rose from GBP81.1m to GBP95.4m, while operating profit jumped 20% to 123.9m. Like-for-like sales were up 35% to GBP1.9bn for the period.
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Earlier this year the group sealed a US$558m deal for US athleticwear chain The Finish Line, a move it said would support its global expansion strategy. It plans to introduce the JD fascia to the US market in the second half of the year.
Finish Line trades from 556 branded retail stores across 44 US states and Puerto Rico in addition to a multi-channel offering. It is also the exclusive retailer of athletic shoes, both in-store and online for Macy’s, operating 375 branded and 188 unbranded concessions within Macy’s stores.
The rise in operating profit in the second half included a contribution of GBP4.8m from Finish Line in the seven-week period post-acquisition.
For the 26 weeks to 4 August, UK sales grew from GBP903.4m to GBP958.1m. For Europe, revenues near-doubled from GBP399.6m to GBP601.9m, while the US – a new market following the Finish Line acquisition – brought GBP180m worth of sales. The rest of the world saw sales increase to GBP106.3m from GBP64.2m.
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By GlobalData“This is another record result for our group demonstrating that our multibrand multichannel premium offer has resilient profitability in its core UK and Ireland market with capacity for continued growth across an increasing number of international markets,” comments Peter Cowgill, executive chairman of JD Sports.
“Against a backdrop of widely reported retail challenges in the UK, it is extremely reassuring that the profitability in the UK and Ireland sports fascias has been further enhanced. This reflects the value of the investments that we have made over a number of years in developing a dynamic multichannel proposition which marries the best of physical and digital retail enabling customers to interact with us where and when they want and through the channel of their choice.
“Sales to date in the second half have continued at similar levels to those in the first half supporting our continued confidence in the robustness of the JD proposition. We remain confident that we are well positioned to deliver an outturn in line with current market expectations which, including a part-year from Finish Line, range from GBP337m to GBP345m and we also remain encouraged by our prospects for future growth.”
Analyst Amy Higginbotham of Global Data says the results demonstrate “hope for UK physical retail.” The results confirm “JDSports’ position as a leader in the UK footwear market as it continues to put pressure on rivals Sports Direct and Footasylum. With trials of JD Sports stores planned to launch in the US imminently, the new acquisition presents further growth opportunities for the group to expand internationally.
“JD Sports’ success can also be attributed to the ongoing athleisure boom as well as its “multichannel multibrand premium offer” which includes product exclusives from brands such as Nike and Adidas. This, as well as its ability to remain relevant and engage with customers through the sponsorship of athletes like Anthony Joshua, sets it apart from emerging online competitors such as Gymshark, Asos and boohoo.com. In addition, continued investment in its physical stores makes JD Sports more resilient to the challenges threatening the UK high street and having a significant impact on competitors like Mike Ashley’s Sports Direct.”
