Retailer JD Sports expects bumper profits rebound as restrictions ease
RETAILER JD Sports Fashion has said profits are set to rebound more strongly than expected over the year ahead as stores reopen after lockdown.
Britain’s biggest sportswear retailer upped its outlook for the year to January 2022, forecasting that profits will surge above pre-pandemic levels as restrictions ease – to between £475 million and £500m. The firm had previously predicted profits of between £440m and £450m for the current financial year.
It comes after the group proved resilient during the pandemic thanks to a successful shift to online trading and a raft of acquisitions in the UK and abroad.
JD Sports reported underlying pre-tax profits falling to £421.3m for the year to January 30 from £438.8m the previous year.
But this beat the group’s recently upgraded forecast for at least £400m and was far higher than the initial £295m pencilled in. On a statutory basis, pre-tax profits fell 7% to £324m, though revenues edged higher to £6.17 billion from £6.11 billion.
Shares in the group lifted nearly 3% as it restarted shareholder dividend payments with a final payout of 1.44p a share.
But it has not yet offered to repay any Covid-19 Government support, including furlough cash.
JD Sports said: “Without this support, it is likely we would have had to make tens of thousands of our colleagues, particularly those who work in stores, redundant.”
The firm said it was able to retain around 70% of its UK revenues across its JD and Size? brands by shifting online during the first lockdown last spring, which rose to 100% through the November lockdown. It also hailed an “exceptional trading performance” in America as economy-boosting measures helped spur on US consumer demand, with profits in the division jumping to £156.6m from £94.2m the year before.
JD Sports has been expanding rapidly in the US through acquisition, recently snapping up Shoe Palace following a deal to buy the Finish Line shoe-store chain in 2018.