JD Sports profits reach £1 billion in first time

JD Sports Fashion is expecting profits to surpass £1 billion this year for the first-time as its more affluent, younger customers continue to spend on trainers and sweatshirts.

The adjusted pre-tax profit at the sportswear company rose by 4.6 percent to £991 millions in the twelve months ending January. This was a record that was slightly better than the City analysts’ forecast.

The statutory pre-tax profit fell to £440.9 from £654.7. The group reported a “significant” increase in adjusted items, to £550.5 from £292.5 the previous year. This was due to primarily noncash items that were not related to day-today operations.

The Manchester-based retailer’s revenue increased by 18% to £10 billion during the period. This is up from £8.5billion in the same period of last year.

JD Sports reported that it saw “significant improvement” in the trade in the second half, especially in North America as the supply from international brands “normalised”.

Regis Schultz reported that after 13 weeks, organic sales had grown by more than 15%.

The company now expects the profit before taxes and adjusted items to be at the same level as the current average consensus expectation of 31.03billion for the 53 week period ending February 3, 2024.

Schultz stated: “The ability to increase profitability in the second half of the year, despite the impact of the international supply chain challenges that were well publicised and resulted in a reduced availability of some key footwear styles gives me great confidence both in our market-leading sports fashion proposition as well as the expertise of my colleagues.”

Andrew Higginson said, “This has been another excellent period for the group.”

JD Sports shares have increased by 1,914 percent in the last decade, amidst the boom of “athleisure”. JD Sports has now become the UK’s biggest non-food retailer with a market cap of PS8.7billion, following the incredible rise. JD Sports has now surpassed Next, valued at £8.2billion, and is more than twice the size of M&S.

Footasylum was established in 2005 by John Wardle, David Makin and their former stakeholder JD Sports Fashion.

JD Sports now has over 3,400 stores in 32 countries, including the US-based DTLR Villa chain and Cosmos Sports of Greece.

JD Sports announced in February that it would spend £3 billion to open 1,750 stores within the next five-years as part of their new boss’ plan to transform it into a “powerhouse” for sports fashion.

Schultz took over in September as CEO after a turbulent period which saw Peter Cowgill, the long-time executive chairman of the chain, removed. The Frenchman claimed that his plans represented a “new and distinct chapter in JD’s growth story”.

The company plans to open 1,750 new stores in Britain and Europe, North America, and elsewhere over the next five years. This will equate to 250 to 350 openings a year.

JD Sports stated that the expansion would help the company to increase its revenue by over 10% every year for the next five years. The group is aiming to generate cash of £1 billion per annum.

JD Sports reported a cash balance of £1.5bn at the end of January. It said that it would be used to “power ongoing development opportunities”.

The company has announced an increased final dividend of 67p. This brings the total dividend payable to 80p for the period, up from 35p.

The company’s shares fell by 4p or 2.5 percent to 166p today.