JD Sports Fashion Plc reported a significant uptick in earnings for 2016, led by its Sports Fashion segment.
Profits before taxes rose 81 percent in 2016 to £238.4 million. Operating profit (before exceptional items) climbed 55 percent to £246.2 million. Revenues jumped 31 percent to 2.38 billion.
Peter Cowgill, executive chairman, said in a statement, “This has been another period of very significant progress for the Group with the headline profit before tax and exceptional items increased by 56 percent to £244.8 million (2016: £157.1 million). Over a three-year period the result has improved by more than 190 percent which is an outstanding performance and provides the Group with a robust platform for further development.
“The foundation of this success remains our core Sports Fashion fascias where JD’s continued strength in its core markets is increasingly being complemented by momentum in our international development, with a net increase of 54 JD stores across mainland Europe during the year.
“It is a great testament to the strength and quality of the people at every level in our businesses that we have been able to consistently deliver outstanding results over a number of years. Our continued strength is principally due to their talent, energy and commitment and I thank everybody involved across the Group for delivering these excellent results.
“Whilst we must recognize that there are external influences which may impact the latter part of the year, notably inflationary pressures arising from Brexit, the Board remains confident in the robustness of the JD proposition and believes that the Group is well positioned for further profitable growth.”
By segment, Sports Fashion saw operating profits (before exceptional items) increase by 50 percent to £245.0 million from £162.9 million. Like for like store sales growth in the period across its European fascias (excluding those businesses acquired in the year) was over 10 percent. Revenues in the segment reached £1.67 billion.
Banners in the Sports Fashion segment include JD, Size?, Chausport, Sprinter, Getthelabel.com, Kooga, Kukri Sports, Focus, Source Lab, Scotts, Tessuti, Cloggs, Nicholas Deakins and Mainline Menswear.
The overall gross margin in Sports Fashion was slightly higher than the previous year reflecting continuing low markdown levels and the impact of the stronger Euro on JD’s Euro denominated businesses where product is sourced and distributed from the UK. The weakening of sterling against the U.S. Dollar after the Brexit vote will cause some headwinds on margin in 2017 but the company is working with its global brand partners to mitigate those pressures.
The Outdoor segment delivered an operating profit for the first time with an overall segment operating profit before exceptional items of £1.2 million against a loss of £4.0 million. Revenues in the segment reached £155,3 million. Its outdoor banners include Blacks, Millets, Tiso, Go Outdoors and Ultimate Outdoors.
Looking ahead, JD Sports Fashion said, “Whilst we must recognize that there are external influences which may impact the latter part of the year, notably inflationary pressures arising from Brexit, the Board remains confident in the robustness of the JD proposition and believes that the Group is well positioned for further profitable growth. Given the significant shift in the timing of Easter this year, it is not relevant at this time to report any comparative current year trading figures.”
Photo courtesy JD Sports
