JD Sports anticipates another record annual performance, AGM will hear

JD Sports Fashion, the Bury-based sports and athleisurewear retailer, will tell shareholders at its AGM today that sales in the first five months of its current financial year are currently five per cent ahead of the previous year.

It will also confirm that it is on track with its review on governance and regulatory compliance. In May this year executive chairman Peter Cowgill, who had been running the business without a chief executive since 2014 and had been embroiled in spats with the Competition and Markets Authority (CMA), stepped down with immediate effect.

Ahead of today’s meeting, the board said it maintains its view that the headline profit before tax and exceptional items for the year end January 28, 2023 will be in line with the record performance for the year ended January 29, 2022.

The board also expects that the phasing of the profit in the current year will reflect a more normalised trading pattern with approximately 35% to 40% of profits generated in the first half.

The board said that the three month intensive programme of works to address priority issues on governance and regulatory compliance matters is progressing as anticipated.

Further, working with external advisors, the group has now commenced a Control, Risk and Compliance Target Operating Model review.

The output from this will be a detailed plan and resource requirements assessment for a programme of works which will ensure compliance with the various regulatory obligations and greater conformity with the Corporate Governance Code.

Earlier this week it was reported that JD is in exclusive talks with private equity firm, Aurelius Group to sell Rochdale-based Footasylum, bowing to pressure from the CMA.

JD had been at loggerheads with the CMA for many months after the watchdog demanded it dispose of Footaslyum, which it had acquired for £90m, on the grounds that it would result in “substantial lessening of competition nationally” which could lead to fewer discounts or lower quality of customer service.

And last month the CMA said JD Sports and Elite Sports, along with Rangers Football Club, had broken competition law by fixing the prices of some Rangers-branded clothing to keep them high.

Former Morrisons chairman, Andy Higginson, joined the board as chair on July 11, 2022, following Mr Cowgill’s departure, and is fully involved in the process to recruit a new group CEO, the board said.

In the meantime, Kath Smith continues in the role of interim CEO and is working well with the group’s senior leadership team to execute strategic objectives and progress the ongoing global development opportunities, said the board.

JD anticipates releasing its interim results for the period to July 30, 2022 in the second half of September.

Russ Mould, investment director at Manchester investment platform, AJ Bell, said: “JD Sports reported resilient trading.

“This suggests athleisure items are still in demand and perhaps indicates that its younger clientele, who may live at home or rent from a landlord who is picking up some of the slack from rising bills, have seen slightly less disruption to their disposable incomes than the rest of us.

“The UK market is about to go into full-scale holiday mode as most schools in England and Wales start their summer break. Sometimes this can result in increased volatility as trading volumes thin out and many experienced traders are sat on the beach.

“Global markets have been stuck in a tight range since mid-June so it will be interesting to see if that changes in the coming weeks.”