JD SPORTS, the so-called “King of Trainers” that has a majority share in the Scottish-based Tiso outdoor clothing and equipment retailer, has attributed the surge in online sales while shops were closed during lockdown and pent-up demand from shoppers returning to stores for record half-year sales and profits.
The company recorded a 52 per cent jump in sales to £3.89 billion for the 26 weeks to the end of July, while statutory pre-tax profits also leapt from £41.5 million to £364.6m. JD Sports, one of the most high-profile brands on the high street, operates 35 JD stores and 13 Tiso outlets across Scotland.
It said it expected to deliver full-year profits of about £750m ahead of analysts’ forecasts of £600m, using a “prudent but realistic set of assumptions” – far higher than the £421m recorded last year and £438m pre-pandemic.
Peter Cowgill, the JD’s founder and executive chairman, pointed to the group’s “outstanding resilience in the face of numerous challenges arising from the continued prevalence of the Covid-19 pandemic”.
He also alluded to widespread international logistics and other supply chain issues alongside “materially lower levels of footfall into stores in many countries after reopening and the ongoing administrative and cost consequences resulting from the loss of tariff-free frictionless trade with the European Union”.
Mr Cowgill noted: “Given these challenges, the record result that the group has delivered in the first half with a profit before tax and exceptional items of £439.5m (£61.9m in and £158.6m in 2019) is extremely encouraging.
“It is most reassuring that the core JD business in the UK and Republic of Ireland performed strongly in the first half delivering a profit before tax and exceptional items of £170.8m (£52.0m in 2020 and £114.9m in 2019).”
The group, which owns FootPatrol, Go Outdoors, Blacks and Millets stores in the UK, opened five new JD Sports outlets during the period, including one in the new St James Quarter in Edinburgh.
Describing the group as being at the “pinnacle of the global sports fashion industry with consumers instinctively knowing that our retail propositions focus on their fashion desires and aspirations in both footwear and apparel with an agile multichannel ecosystem delivering the highest standards of retail execution and consumer experience”, Mr Cowgill added: “This is respected by the international brands who regularly call JD out as a premier global strategic partner.
“We remain absolutely confident that our inherent strengths in retail dynamics and operations provide us with a robust platform to make further progress.”
Mr Cowgill added: “At this time, we are generally encouraged by our performance in the first few weeks of the second half although retail footfall remains comparatively weak in many countries.
“Assuming a prudent but realistic set of assumptions for the peak trading period ahead which take into account the absence of stimulus in the United States for the second half of the year, in addition to current industry-wide supply chain challenges, we presently anticipate delivering a headline profit before tax for the full year of at least £750m.”
AJ Bell investment director Russ Mould described JD Sports’ achievements in the retail sector in the last decade as “remarkable” and this was reflected once again in record first-half results. He noted: “Partly the business has benefited from wider trends around athleisure, as the lines between what younger people wear to work out, go out and stay in become more blurred.
“However, it has been razor-sharp in its focus on its customers, delivering what they want, when they want it and how they want it.”
At Hargreaves Lansdown, Susannah Streeter, senior investment and markets analyst, Hargreaves Lansdown, pointed to the firm’s wins as lockdowns have eased but warned: “Supply chain issues could still trip up sales in the coming months.
“Demand for trainers and the trend for althleisure wear shows little sign of going out of fashion. The sports leisure market in the US is huge and here JD Sports is stepping up the pace of sales, which will be key to future growth prospects. It’s already the group’s most profitable territory, thanks to multiple acquisitions and rebranding of stores.
“It’s also been a big beneficiary of the Biden bounce of stimulus cheques, with recipients splashing the cash on coveted sneakers and sportswear.
“But ongoing pandemic restrictions and a shift in shopping behaviour has meant footfall in stores remains weak in many key markets. Despite its slick operating model, and investing big in its logistics operation, it’s not immune to supply chain challenges.”