‘King of trainers’ reigns as profits dazzle
JD SPORTS has broken another record with soaring half year earnings of £46.6m an increase of 80% on the previous year.
The Bury company, which has nearly 700 shops across Europe, but is best- known for its JD shops on the British high street lived up to its status as ‘king of trainers’ as sales in the 26 weeks to August 1 rose 20% to £809.9m.
Like-for-like sales for the period across the group surged by more than 10% which JD said was “an exceptional performance.”
Executive chairman Peter Cowgill said he was “delighted” with the performance: “In an extremely competitive market for sports fashion footwear across Europe, we must acknowledge that the levels of organic growth that we have seen over the last two years are unlikely to continue indefinitely, albeit the JD brand continues to strengthen and further opportunities prevail.
“Our current successful exploitation of these favourable market conditions reflects investments that we have made over a number of years in developing our multi-channel retail proposition and driving improved buying, merchandising and retailing disciplines. We continue to invest heavily in these areas.
“Given the demanding comparatives following two years of strong revenue growth, we are encouraged by the positive nature of the trading to date in the second half across our core fascias.”
Cowgill, who has presided over a period of extraordinary success at JD over the last decade, said the planned new National Living Wage could affect the number of people it hires.
Speaking to the BBC, Mr Cowgill said the increased “spending power” of customers was unlikely to outweigh the higher labour costs at his firm.
“It is at the cost of expansion, development and perhaps therefore the repercussion in the wider sense is the ongoing cost in terms of increasing employment,” he said.
In line with the strong results, JD lifted its interim dividend 4.3% from 1.15p to 1.20p
During the period the company said its international rollout had continued with a net increase of 27 stores across Europe. So far the revenues in those stores are in line with management’s expectations
Following the period end, the retailer has opened its first two stores in Belgium and in the second half a new flagship store will be opened on Nieuwendijk in Amsterdam.
Gross capital expenditure increased by £21.4m to £47.7m as JD pumped cash into store refits and overseas expansion.
Closer to home, investment to increase the operational capacity and flexibility of its warehouse on the Kingsway business park in Rochdale increased by £4.7m to £7.8m. In addition the company has also acquired a plot of land next to our existing Kingsway site to facilitate potential future development at a cost of £4.7m.
