JD Sports posts record interim results; confident over full year

JD Sports posted record interim results on Tuesday as pre-tax profit and revenue rose despite a "challenging" backdrop as its international expansion continues.

In the 26 weeks to 4 August, pre-tax profit increased 19% to £121.9m on revenue of £1.85bn, up 35%. Meanwhile, operating profit rose 20% to £123.9m, which includes a £4.8m contribution from Finish Line in the seven-week period post acquisition in June.

Like-for-like sales were up 3% during the period and the interim dividend was lifted 4% to 0.27p.

JD saw a net increase of 18 stores across mainland Europe and an increase of 21 in the Asia Pacific region, including first stores in South Korea and Singapore and additional stores in Malaysia and Australia.

While many other retailers are moving away from bricks and mortar and focusing on the online segment, JD Sports said its store base remains essential to brand awareness. The group does not expect a material movement in the size of its store base in the UK and Ireland, but said it continues to work with landlords on ensuring that its portfolio of leases has "the maximum flexibility and the lowest committed cost possible".

Executive chairman Peter Cowgill said: "This is another record result for our group demonstrating that our multibrand multichannel premium offer has resilient profitability in its core UK and Ireland market with capacity for continued growth across an increasing number of international markets.

"Against a backdrop of widely reported retail challenges in the UK, it is extremely reassuring that the profitability in the UK and Ireland Sports Fascias has been further enhanced. This reflects the value of the investments that we have made over a number of years in developing a dynamic multichannel proposition which marries the best of physical and digital retail enabling customers to interact with us where and when they want and through the channel of their choice."

Cowgill said the company is well positioned to deliver an outturn in line with current market expectations which, including a part year from Finish Line, range between £337m and £345m.

Laith Khalaf, senior analyst at Hargreaves Lansdown, said: "There’s not too many retailers on the UK high street who can boast a 50% rise in their share price over the last year, but that’s just the sweet spot JD Sports finds itself in. The retailer is now knocking on the door of the FTSE 100, and currently matches Marks & Spencer in terms of its equity market value.

"JD’s performance shows it’s possible to thrive on the UK high street, though future store openings in this country are likely to be limited. That means the retailer will be looking to digital and overseas sales, and possibly further acquisitions, to drive growth forward from here."

At 0918 BST, the shares were up 1% to 492.10p.