Athleisure demand drives JD Sports HY profit
HY pre-tax profits surge to GBP102.7m (US$136.4m)
Revenue rises 41% to GBP1.37bn
Sports Fashion operating profits jump 29.2% to GBP103.2m
UK retailer JD Sports Fashion has seen continued demand for athletic leisure products help drive a 33% jump in pre-tax profits and achieve a new record for the first half of the year.
The retailer of sports, fashion and outdoor brands today (12 September) said pre-tax profits for the 26 weeks to 29 July surged to GBP102.7m (US$36.4m) from GBP77.4m last year.
Revenue rose 41% to GBP1.37bn (US$1.82bn) from GBP970.6m a year earlier, helped by the acquisition of outdoor specialist Go Outdoors. Meanwhile, like-for-like sales in the JD and Size fascias in the UK and Ireland were up 3%, and total gross margin of 48.% was ahead of the prior year at 43.3%.
Operating profit for the period also increased 33% to GBP103.3m, driven in the main by its Sports Fashion fascias, which include JD, Chausport and Sprinter, where operating profits jumped 29.2% to GBP103.2m.
The retailer also hailed a "positive contribution" from Go Outdoors in the period, which caused outdoor gross revenue to more than double on last year to GBP196.6m.
"The base of our ongoing excellent multichannel retail performance comes from the continued strength of our core UK and Ireland Sports Fashion fascias," said executive chairman Peter Cowgill. "We have strengthened our foundations by significant progression internationally both instore and online so that the JD fascia now has a much broader store and multichannel consumer reach and brand influence globally."
Cowgill added the company expects the year end outturn to be towards the upper end of market expectations, which currently range from about GBP268m to GBP290m.
Fiona Paton, retail analyst at GlobalData, said JD Sports "continues to outperform the overall sportswear market."
She added: "The group is now closing the gap on rival Sports Direct, with its share of the UK sports clothing market due to rise 3.7 ppts in 2017 while Sports Direct, the market leader in sports clothing, drops 0.8 ppts to 20.1%."
But while the retailer has a strong following among men, being the fifth largest player in the UK menswear market in 2017, Paton notes it must consider how it can better appeal to women given the rising level of competition.
"Its online homepage and store window displays remain male centric in terms of merchandising, messaging and showcased product so risks losing relevance with female shoppers," she explains. "Lifestyle brands such as Sweaty Betty and Lululemon are better placed to win female spend by directly targeting women and capitalising on both the athleisure trend and the health and wellness trend."
Meanwhile, Paton says the launch of Asos's own range of sportswear in November presents a "considerable threat" to JD Sports due its broad appeal and relevant branded proposition. "Asos also has the advantage of a loyal customer base as Asos Premier (its delivery saver scheme) ensures repeat purchases and increased convenience for shoppers."