JD Sports delivers record results as revenues soar to £2.721bn

Bury JD Sports based has published a record set of results for the last six months.

Revenues increased by 47% to £2,721.2m with strong total like for like sales growth in stores of 12%.

Group EBITDA on a comparable accounting basis increased by 37% to £235.2m and profit before tax and exceptional items on a comparable accounting basis increased by 36% to £166.2m.

Reported profit before tax increased by 6.6% to £129.9m after net adjustments of £7.6m following transition to IFRS 16 ‘Leases’ and exceptional items of £28.7m.

The international development of the firm continues with an increase of 23 JD stores across mainland Europe and seven new JD stores in the Asia Pacific region.

Six JD stores now trading in the United States with the physical stores now complemented by a trading website.

There was an encouraging performance from the Finish Line chain in the United States with operating profit before exceptional items on a comparable accounting basis of £34.7m for the seven weeks following acquisition.

Executive chairman Peter Cowgill said: “I am very pleased to report that this has been another period of significant progress for the group with revenue growing by 47% to £2,721.2 million and the headline profit before tax and exceptional items increasing by a further 30% to £158.6 million.

“Against a backdrop of widely reported retail challenges in the UK, it is extremely encouraging that JD has delivered like for like sales growth of more than 10% with an improved conversion reflecting consumers’ increasingly positive reaction to our elevated multichannel proposition where a unique and constantly evolving sports and fashion premium brand offer is presented in a vibrant retail theatre with innovative digital technology.

“JD also continues to gain momentum in Europe with a further double digit increase in total like for like sales and a net increase of 23 stores in the period.

“We are pleased by the continued positive trends to date in the second half in Sports Fashion whilst recognising the tougher comparatives ahead.

“Notwithstanding the ongoing uncertainty with regards to Brexit, the board is confident that, without the impact from the transition to IFRS 16, the group would have been on track to deliver headline profit before tax for the full year at the top end of market expectations which currently range from £402 million to £424 million.

“However, after adjusting for the impact of the transition to IFRS 16, we would expect to deliver results at the mid-point of expectations. We remain encouraged by our prospects for further growth.”

Russ Mould, investment director at Manchester investment platform AJ Bell, said: “JD Sports is proof that the best-run retail businesses still have a chance of making big money in a difficult market.

“It appears that JD’s latest sales boost has been helped by getting more interested customers to open their wallets and actually buy items rather than simply browse, as per the reference to having ‘improved conversion’.

“Now that it has made a massive success of the UK market, JD’s story is now one of international roll-out. Europe is already off to the races with the company deciding to increase the physical size of new stores, showing confidence that consumers like its offering.

“Asia Pacific’s growth is being held back by property availability, but operations in the US are slowly expanding.

“While JD calls itself the ‘undisputed king of trainers’, clothing is increasingly important to the overall proposition, selling t-shirts, hoodies, tracksuits and more.

“The acquisition of boutique men’s clothing brand Pretty Green and a majority stake in designer clothing seller Giulio Fashion earlier this year would suggest it is prepared to go beyond the standard sports-related leisurewear.

“It could use these brands to help expand the appeal of its stores to a wider audience. This product diversification theme is also a continuation of the 2016 acquisition of camping-to-cycling retailer Go Outdoors which has given JD a strong position in the fast-growing outdoor clothing market.”