JJB Sports plc, the U.K.s largest sporting goods chain, reported that total revenue for the first 18 weeks of the fiscal year through June 3 declined 1.2% versus the same period last year and includes a 1.8% decline in comparable store sales. The figures include results from JJBs retail stores and health clubs. However, the combined gross margin from both the retail stores and health clubs for the 18 week period was 260 basis points higher than that earned in the comparative period last year.
JJB had seen a 4.3% increase in total revenue for the 9 weeks through April 1, but the company had pointed out then that the spring/summer numbers from last year would be difficult to match this year because of the levels of revenue from England replica kit and associated accessory products achieved before and during the FIFA World Cup in 2006. Excluding all replica kit revenues from total revenues for both years, total revenue would have increase 2.6% for the period. All other product categories achieved increases in revenue. A significant part of the increase in the combined gross margin arose from the retail store results.
The introduction of adidas and Nike in-store areas within the companys superstores format is proceeding. JJB had 83 adidas and 53 Nike in-store areas in operation on June 3. JJB estimates that it will have 200 adidas areas and approximately 100 Nike areas by the end of this calendar year. The trading results from those retail stores that have had in-store areas installed, both in terms of revenue and of gross margin, are better than the average for our retail stores.
JJB has opened a an additional three combined health clubs/superstores since the start of the fiscal year and trades from 42 health clubs. Revenue from the health clubs and indoor soccer centers has increased by 21.9% for the first 18 weeks of this year, compared to last year, and memberships at the end of May totaled 181,200 members, compared to
153,000 at the same date last year.
Although opening programs for combined units can be affected by delays in obtaining planning permissions and the length of the build period, JJB currently expect to open a total of eight combined units during the fiscal year and 17 combined units in the following year.
Roger Lane-Smith, JJBs Non-executive Chairman, commented, “Trading results for the first 18 weeks of the current accounting period is in-line with our expectations and I remain confident that our policies of product differentiation within our retail stores and the expansion of our chain of health clubs, will provide future growth”.