JD Sports in bumper profits upgrade, boosted by pent-up demand following lockdowns

By Joanna Bourke

JD Sports has posted higher profits

(Picture: JD Sports)

High Street retailer JD Sports has posted record first half profits and said more growth is on the way, despite numerous challenges the industry is grappling with.

The FTSE 100 chain said in the six months to July 31 it benefited from the impact of additional trade via acquisitions, good online growth and strong pent-up demand to go shopping once stores reopened from lockdown.

It posted profit before tax and exceptional items of £439.5 million. That was up from £61.9 million a year earlier when retailers were hammered by lockdowns, but it was also higher than before the Covid-19 crisis, with £158.6 million recorded in the same period in 2019.

JD Sports, whose executive chairman is Peter Cowgill, said it expects pre-tax profits for the full year of at least £750 million. Analysts had pencilled in around £600 million.

Cowgill told the Evening Standard he is “delighted by the recovery that has occurred”, with London store footfall improving, albeit more slowly than other parts of the UK.

He also said in a company 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.”

The firm has made a number of acquisitions over the last year which have helped boost its presence in the US, including the $495 million purchase of Baltimore-based shoe chain DTLR Villa.

JD Sports did not declare a interim dividend, but it pointed to a potentially larger full year dividend subject to the performance of the firm over the period “taking into account the consequences of any potential further restrictions on trading”.

Meanwhile, the retailer reiterated that it is “very disappointed” by a recent decision by the UK competition watchdog that ruled it may be forced to sell off its Footasylum brand.

JD Sports said: “The CMA's findings are, however, provisional and JD remains committed to its transaction goal of improving Footasylum's resources, access to product and differentiated customer proposition. JD will continue to make its case strongly to the CMA before it releases its final report, due in October 2021.”

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