JD Sports Fashion Plc reported significantly improved profits in the first half ended July 31 as revenues grew 52.7 percent.

Profits before taxes reached £364.6 million against £41.5 million a year ago. On an adjusted basis, profits before taxes came to £376.6 million against £44.9 million. Sales totaled £3,885.8 million compared with £2,544.9 million a year ago.

Group highlights in the period:

  • Record result for the first half with profit before tax and exceptional items of £439.5 million (2020: £61.9 million; 2019: £158.6 million) including significant contributions from:
    • United States where the aggregate profit before tax and exceptional items increased to £245.0 million (2020: £73.4 million; 2019: £35.7 million) which includes a total contribution of £72.9 million from the recently acquired Shoe Palace and DTLR businesses. All of the Group’s businesses have successfully capitalized on the favorable trading conditions provided by the second round of fiscal stimulus from the Federal Government.
    • JD business in the core UK and Republic of Ireland market where the profit before tax and exceptional items increased to £170.8 million (2020: £52.0 million; 2019: £114.9 million) with strong retention of sales through digital channels in the first quarter whilst the stores were temporarily closed, combined with strong pent-up demand after reopening.
  • ·Significant acquisitions in the period include:
    • DTLR which enhances the Group’s exposure to key consumer demographics in the highly important East Coast market in the United States; and
    • Marketing Investment Group in Poland to give the Group a presence in Eastern Europe for the first time.
  • International development of JD in other markets continues to progress, although the pace of new stores has been impacted by the ongoing restrictions on construction and fit-out works in certain markets — 21 new JD stores opened across Western Europe, 6 new JD stores in the Asia Pacific region, 4 new stores in Australia, 2 stores in Thailand, and 66 stores now trading as JD in the United States.
  • Outdoor returned to profitability delivering a profit before tax and exceptional items of £10.8 million (2020: loss of £16.8 million).
  • Commenced a major program to enhance the logistics network across the UK and Western Europe with long term leases being progressed on two new major facilities:
    • Derby (UK): 515,000 sqft facility which will be dedicated to the fulfillment of online orders for JD in the UK with initial go-live anticipated by Autumn 2022 and full operational use in early 2023;
    • Heerlen (the Netherlands): 620,000-square-foot facility, which will process substantially all of the volume required for stores and online orders in Western Europe with initial go-live anticipated by Autumn 2023 and full operational use by mid-2024

Peter Cowgill, Executive Chairman, said in a statement, “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. Given these challenges, the record result that the Group has delivered in the first half with a profit before tax and exceptional items of £439.5 million (2020: £61.9 million; 2019: £158.6 million) is extremely encouraging.

“It is most reassuring that the core JD business in the UK and Republic of Ireland performed strongly in the first half delivering a profit before tax and exceptional items of £170.8 million (2020: £52.0 million; 2019: £114.9 million). This result also includes a particularly strong performance from the Group’s banners in the United States which have delivered a combined profit before tax and exceptional items of £245.0 million (2020: £73.4 million; 2019: £35.7 million).

“Ultimately, the Group is at the pinnacle of the global sports fashion industry with consumers instinctively knowing that our retail propositions focus on their fashion desires and aspirations in both footwear and apparel, with an agile multichannel ecosystem delivering the highest standards of retail execution and consumer experience. This is respected by the international brands who regularly call JD out as a premier global strategic partner.

“We remain absolutely confident that our inherent strengths in retail dynamics and operations provide us with a robust platform to make further progress.

“At this time, we are generally encouraged by our performance in the first few weeks of the second half although retail footfall remains comparatively weak in many countries. Assuming a prudent but realistic set of assumptions for the peak trading period ahead which take into account the absence of stimulus in the United States 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 £750 million.

“The JD brand is increasingly recognized on a global basis and this result bears testimony to the underlying strength of our business. I would like to express my sincere thanks and gratitude to everyone in all of our Group businesses for their remarkable contribution in delivering these excellent results during such a challenging period.”

Photo courtesy JD Sports