Fashion firm is weathering retail storm thanks to overseas growth

JD Sports

Bury based JD Sports has announced an update on its performance following the Christmas trading period.

The firm said it has seen significant progress in its international development with total sales growth for the cumulative 48-week period to 5 January 2019 of 15% across global sports fashion brands.

The figures do no include the recent acquisitions Finish Line in the US and Sport Zone in Iberia.

The total like for like sales growth in the overseas brands for the same 48-week period is now more than 5%.

This includes a consistently positive like for like performance across Black Friday and the Christmas period.

Gross profit margins have been maintained at the same levels as the previous year as JD Sports continues with its policy not entering into short-term discounting.

A statement to the Stock Market said: “Given the well-publicised challenges within the wider UK retail market, we are pleased with this trading result which further demonstrates the robust foundations of our dynamic multi-brand multichannel proposition across our core market and our capacity for further growth across an expanding geographical reach.

“During the second half we opened our first two stores in Thailand and shortly before the key holiday period we also opened our first five JD stores in the United States which includes the conversion of three existing Finish Line stores.

“It is too early to draw any conclusions from the early performance of JD in the United States although we are encouraged by the developments to date.

“This initial performance has given us the confidence to extend our initial trial of the JD fascia with the conversion of up to 15 further Finish Line stores planned for the first half of 2019.

“We are also encouraged by the ongoing performance of the wider Finish Line business which has delivered improvements in both sales and margin relative to the prior year.

“We remain confident that we are well placed to exploit the ongoing opportunities that exist to improve the future profitability of this business.”

The first phase of works to fit out the 352,000 sq ft extension at the firm’s Kingsway warehouse has now been completed enabling a partial use of the additional space.

Work to install the additional automation equipment is ongoing with completion scheduled for late Spring.

Group profit before tax for the year ended 2 February 2019 will be at the upper end of published market expectations, which currently range from £325m to £352m.

The preliminary results for the year ended 2 February 2019 will be published on 16 April 2019.

Peter Cowgill, executive chairman, said: “I am pleased with the continued progress of the group both in terms of our performance in existing markets and the recent positive developments in the United States.

“We are confident that domestically and internationally, in stores and online, our unique and often exclusive sports fashion premium brand offer provides a solid foundation for future development.”

Russ Mould at AJ Bell said: “Sports fashion retailer JD Sports puts its best foot forward with its first update of 2019, demonstrating that retail may be difficult in the current environment but is clearly not impossible to to keep the tills ringing.

“While like-for-like sales growth of 5% is solid, what is particularly impressive is that margins have been maintained.

“The company has not reacted with panic to an uncertain consumer backdrop but has still clearly achieved the sales required to not just hit market expectations but come in at the top end of them.”

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