Retailer JD Sports on course to beat profit forecasts
Mike Ashley-owned chain says profits would grow by even more than previously-predicted 17%
The queue outside JD SPorts on Henry street during the Christmas sales. Photograph: Alan Betson / The Irish Times
Retailer JD Sports said it was on course to beat annual profit expectations as it posted a bumper 12 per cent rise in like-for-like sales over the Christmas period.
The Mike Ashley-owned chain, which made an unsuccessful bid for Irish sports retailer Elverys last year, saw shares rise 7 per cent.
The company said its headline profits for the year to the end of January would grow by even more than the 17 per cent increase to £90 million that had been at the top end of forecasts.
The increase in like-for-like store sales for the five weeks to January 3rd reported in the trading update continued a trend in the financial year-to-date with sales also up 12 per cent in the 48-week period.
JD said that while it had faced higher infrastructure costs to support the wider international business, it was now confident that headline profit before tax and exceptional items would “exceed the top end of market expectations”. Full year results will be announced on April 15th.
Executive chairman Peter Cowgill said: “I am delighted to be able to report that the great momentum I reported in the sports fascias in all our territories earlier in the financial year has been maintained during the key Christmas period.”
He said the strong growth came despite tough comparatives with the year before. JD Sports, founded in Bury in 1981, now has more than 800 stores in six countries, with the estate including outdoor brands Blacks and Milletts. It disposed of fashion chain Bank in November and the loss-making business went into administration earlier this month.
Investec analyst Kate Calvert said the “exceptional” sales performance was driven by JD’s core sports division while outdoor brands were more challenging — though did take off when the weather became cooler.
Meanwhile the effect of Black Friday at the end of November brought forward sales and while JD did plan promotions these were “reasonably low key”, she said.
Cantor Fitzgerald’s Freddie George said: “The trading update is well ahead of our and market expectations due to a very strong ‘knock-out’ performance from the sports retail division.”