Overseas growth helps underpin JD
● Retailer also overcomes tough UK backdrop to deliver solid results
JD Sports is to continue with its overseas expansion after battling Britain’s tough retail backdrop to deliver strong half-year results.
The sportswear chain, which also owns Blacks and Go Outdoors and has a controlling stake in Scottish outdoor retailer Tiso, reported a 19 per cent rise in pre-tax profits to £121.9 million for the six months to 4 August.
Like-for-like sales at the group’s high street sports fashion stores were “marginally positive”, and lifted 4 per cent including online trade.
Its outdoor brands, which also include Millets, endured a “difficult” first half after the prolonged summer heatwave dented demand.
Total like-for-like sales, including online, for its outdoor brands just made it into positive territory, having initially jumped 7 per cent in the first three months.
The firm said it believed the sales blow was a weatherrelated “one-off ” and remains “more widely reassured for the longer term by further growth in sales of camping and other outdoor activities”.
0 The group now has 390 sports fashion stores across the UK and Ireland
JOHN MOORE, ANALYST
The group noted that its global expansion continued apace in the past year, with 39 JD stores opened overseas, comprising 18 in Europe and 21 in the Asia Pacific region.
It has also recently secured its US market debut after taking over American sportswear company Finish Line for $558m (£428m) in what it has previously branded a “transformational” deal.
JD said it continues to see value in a high street store portfolio and does not expect to shed shops on a significant
scale, although it is working with landlords to ensure “our portfolio of leases has the maximum flexibility and the lowest committed cost possible”.
The group now has 390 sports fashion stores in the UK and Ireland, out of 2,184 globally, and 239 outdoor outlets.
Executive chairman Peter Cowgill said: “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 multi-channel proposition which marries the best of physical and digital retail.”
John Moore, senior investment manager at Brewin Dolphin, said: “JD Sports seldom disappoints with its results and this was no exception.
“All of this comes against a well-publicised backdrop of a struggling retail sector. Yet, JD Sports continues to open more stores – particularly in Europe and in Asia Pacific.
“The company has managed to maintain the entrepreneurial drive that made it a success in the first place and looks well placed to weather the storm currently hanging over the high street.”
Hargreaves Lansdown’s Laith Khalaf noted: “Expansion hasn’t come cheap, and that’s meant JD has swung from having net cash of £222.7m on the balance sheet to being in debt to the tune of £85.1m. That level of borrowing is well-covered by earnings though, and shareholders won’t mind the additional spend as long as it bears fruit.
“JD’S performance shows it’s possible to thrive on the UK high street, though future store openings in this country are likely to be limited.”
“JD Sports seldom disappoints with its results and this was no exception.”