TOP NEWS: JD Sports lifts profit forecast as sales surge in first half

(Alliance News) - JD Sports Fashion PLC on Tuesday reported bumper sales in the first half of ...

Alliance News 14 September, 2021 | 9:14AM
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(Alliance News) - JD Sports Fashion PLC on Tuesday reported bumper sales in the first half of 2021, benefiting from pent-up demand for sports apparel as pandemic restrictions were eased.

Shares in JD Sports were up 7.3% at 1,126.00 pence in London on Tuesday morning, by far the best FTSE 100 performer.

Revenue in the six months to July 30 was GBP3.89 billion, up 53% from GBP2.54 billion a year earlier, while pretax profit surged to GBP364.6 million from GBP41.5 million.

Pretax profit before exceptional items multiplied to a record GBP439.5 million from GBP61.9 million a year earlier and GBP158.6 million two years prior.

First-half pretax profit before exceptional items in the UK and Ireland was GBP170.8 million, compared to GBP52.0 million a year earlier and GBP114.9 million two years prior.

Additionally, sales of outdoor products swung to a pretax profit before exceptional items of GBP10.8 million from a loss of GBP16.8 million in 2020.

"The group continues to demonstrate outstanding resilience in the face of numerous challenges arising from the continued prevalence of the Covid-19 pandemic in many countries, widespread strain on international logistics and other supply chain challenges, 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," Chair Peter Cowgill said.

Cowgill said he is "encouraged" by the start of the second half, though added that footfall remains "comparatively weak in many countries".

The FTSE 100 constituent also put effort into international development during the six month period, opening 21 new stores in western Europe and 6 in Asia Pacific, including 4 in Australia and 2 in Thailand.

In the US, pretax profit before tax and exceptional items multiplied to GBP245.0 million from just GBP73.4 million a year before. The recent result benefited from a GBP72.9 million contribution from Shoe Palace and other acquisitions.

JD Sports declared no interim dividend for the first-half, but tipped a "potentially larger final dividend" could come, depending on its fortunes in the remainder of its financial year.

"Assuming a prudent but realistic set of assumptions for the peak trading period ahead which take into account the absence of stimulus in the US 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 GBP750 million," said Cowgill.

Back in April, JD Sports predicted headline pretax profit, meaning before exceptional items, to be GBP475 million to GBP500 million in the year to January 2022. Pretax profit by the same measure was GBP421.3 million in the year that ended this past January 30. This was down 4.0% from GBP438.8 million the year before.

By Josie O'Brien;

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Securities Mentioned in Article

Security Name Price Change (%) Morningstar
JD Sports Fashion PLC 1,089.00 GBX 2.30 -

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