JD Sports on track as profits rise

JD Sports Fashion delivered another set of market-beating results today after the retail chain increased half-year profits by 36% to £19.3m (€22.9m).

JD Sports Fashion delivered another set of market-beating results today after the retail chain increased half-year profits by 36% to £19.3m (€22.9m).

The improvement, which continues JD’s record of out-performance in the retail sector, was driven by the company’s sports stores, which saw operating profits increase by £4m (€4.7m) to £21.6m (€25.6m) following the World Cup.

It also noted signs of improvement in its fashion business, which trades as Bank and Scotts. Across the group, like-for-like sales were 2.8% higher in the six months to the end of July, reflecting a 3.9% improvement for sports fascias and a drop of 3.8% in the fashion business.

Freddie George, a retail analyst at Seymour Pierce stockbrokers, described the results as “excellent” and said JD had beaten market forecasts.

The firm – recently promoted to the FTSE 250 Index – said the results gave it a good foundation for an improved full year performance but warned it faced tough comparatives with a year earlier as well as an uncertain outlook.

JD, one of the retail sector’s strongest performers during the recession, said current trading in the UK and Ireland “continued to be satisfactory”.

Like-for-like sales in the first four weeks of the second half showed a rise of 2.7%, with sports stores ahead 2.1% and fashion up by 7.1%.

In a previous update, the chain said demand for World Cup merchandise had boosted sales in the run up to the tournament, with fans snapping up replica shirts and accessories.

The firm has 350 JD and Size? outlets as well as 73 branches of sports shoe retailer Chausport in France, which it bought last year.

The group said it was optimistic that Chausport and future potential overseas moves will further improve the sports side of the business.

It added that refurbishments prior to the period meant the sports stores had a more “consistent quality, look and feel”. A total of 11 stores have been opened in the UK, compared to five last year.

JD noted improvement in its fashion retail business, which saw a reduction in operating losses before exceptionals from £2.7m (€3.2m) to £2m (€2.3m).

The firm’s fashion brand Bank, which is mainly based in the North and Midlands of the UK, sells branded items aimed at teenagers and those in their twenties.

JD said it remains optimistic that Bank will develop into a successful national chain as the number of stores in the period grew from 65 to 70.

The group said a change in management at Scotts, which sells branded fashion to younger men, should lead to improvements in the chain, which has 37 stores across the country.

The group embarked on an overseas buying spree last year, following up the Chausport acquisition by snapping up rugby brands Canterbury and Canterbury of New Zealand as well as related distribution assets.

JD said the Canterbury brand, which sells clothing, footwear and accessories, delivered a small profit.

It also bought Kooga Rugby in Rochdale and Duffer of St George, which it now uses as an own brand label in its JD stores.

Stripping out exceptional items, JD’s pre-tax profits were 64% higher at £16.6m (€19.7m).

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