JD Sports hits ground running as profits soar

​JD Sports Fashion said profits doubled as demand for branded athletic footwear ​helped it to achieve record first-half trading.

Peter Cowgill, chairman of JD Sports

​The retailer said it expects to report full-year results to come in towards the upper end of market expectations after strong demand at its core sports divi- sion.

​JD Sports said its profit before tax and exceptional items doubled to ​£​20​m in the 26 weeks to Aug​ust​ 2, which it described as a record performance​.

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Revenues rose 27 per cent​ to ​£721.5​m.

The firm said comparisons with the previous year ​will be ​tougher in the second half than they had been in the first and noted the full-year outcome will be significantly dependent on Christmas trading.

​The retailer, which has 580 sports outlets in Europe, benefited from a cut in losses at its outdoor arm, which​ ​​includes the Blacks and Millets chains bought out of administration in 2012.

However, the 88-strong Bank​​ clothing fascia continues to trouble the company as JD’s fashion division slumped to a deeper loss of £8.2​m.

​E​xecutive chairman Peter Cowgill said the group ​i​s well placed to deliver results towards the upper end of current market expectations.

Kate Calvert, a retail analyst at Investec Securities, said: “Good numbers were expected following its first quarter trading update, but a 100​ per cent​ increase in half-year results has exceeded expectations.

“This has been driven by sports, which has had another strong footwear performance, and progress in Europe.”

Profits in the sports division, which includes 348 JD stores in the UK as well as others in France, Spain, Holland and Germany, increased to £34.8​m​ from £26.1​m a year earlier.

It said all its sports fascias benefited in the period from the trends for branded athletic footwear seen over the last 12 months.

The operating loss in outdoor reduced from £8.9​m to £5.6​m after JD​ ​developed “clear and distinct propositions” for the two chains.

It is looking at options to develop its new concept Ultimate Outdoors fascia after opening a trial store in Preston showcasing its outdoor offering.

Prior to the update analysts were on average forecasting an underlying pre​-​tax profit for 2014-15 of about ​£​83​m, up from ​£77​m in 2013-14.

First-half sales at stores open over a year in the group’s core European sports division, which sells trainers and hoodies, rose 13 per​ ​cent.

Like-for-like sales at its Blacks and Millets outdoor retail chains, bought from administrators for ​£20​m, increased 12 per​ ​cent.

The division broke even for the first time in the second half of 2013-14 after improvements to stores, operations and management.

​The group said its loss-making Bank and Scotts fashion division, where management has been overhauled, continued to disappoint, though trading did improve in the second quarter.

In May, the firm announced that its ​c​hief ​e​xecutive Barry Bown had stepped down from the board after 30 years with the company and would not be replaced.

The group’s growth strategy has long been led by Mr Cowgill, who takes a key role in the day-to-day running of the company.​​

​JD said it ​will pay an interim dividend of 1.15​p, up 3.4 per​ ​cent.