Fashion firm JD Sports reported strong results for the year ended January 29, with revenues rising to £8563 million from £6167 million and gross profit up from 48% to 49.1%
Pre-tax profit excluding exceptional expenses was £947.2 million, more than double the previous year’s £421.3 million. It was also more than double the record £438.8 million earned during the period to February 1, 2020, its last full year before the pandemic. The company also noted that its Outdoor segment returned to profitability.
But it also warned that this year’s profit could be flat, as the current challenging backdrop affects the business despite the strong demand it is experiencing.
Interim CEO Helen Ashton said the company is «particularly encouraged» by the strong performance in North America and says it is increasingly clear that its progress there is having a positive long-term impact on both overall results and its relationship with international brands.
Ashton added that the process of hiring a CEO is underway «with a number of high-value candidates at various stages of the process, including some who have just made their interest in the position known.» The process of hiring a new non-executive chairman is also progressing «at a good pace.»
A good year
Over the past year, the company has performed well in the Sports Fashion retail chains in the United Kingdom and Ireland and in North America in particular, although the situation was more complicated in Europe, as well as in Asia-Pacific.
In the UK and Ireland (where the JD Sports chain is a major player) profit before tax and exceptional expenses increased to £471.2 million, up from £262.7 million achieved in 2021 and £288.5 million in 2020, «with strong sales retention through digital channels during the first quarter when stores remained temporarily closed, combined with strong demand following the reopening.»
In high-end sports, consumer demand has been good throughout the period.
It has continued to see both physical and digital strength as it invests in both segments. For example, its new flagship store at Westfield Stratford «is the most technologically advanced store in our network, with a number of consumer-focused innovations including self-checkouts.»
Digital revenues in the U.K. and Ireland now account for about 30% of sales, up from 22% before the pandemic, and «there is no reason to think they can fall back to those historic levels.»
In North America, profit before tax and exceptional expenses rose to £343 million from £171.9 million in 2021 and £94.2 million in 2020. A figure that includes £57.3 million from Shoe Palace and £50.6 million from DTLR.
«All of the group’s businesses have been able to take advantage of the favorable trading conditions provided by the second round of fiscal stimulus from the U.S. Federal Government,» it said.
But in Europe, the pandemic and the loss of tariff-free, frictionless trade with the European Union «combined to create a challenging operating environment.» The first half of the year was «particularly difficult» in France, Belgium, Portugal, the Netherlands and Germany.
However, with higher conversion rates, comparable store revenues across Europe in the second half were 10% higher than in the pre-pandemic period.
In Asia-Pacific, pandemic restrictions had a significant impact in all markets. Although all stores were operating during the last quarter, footfall remained below pre-pandemic levels in all markets. Australia was the market where footfall was closest to normal levels, something that combined with strong conversion, resulted in encouraging comparable store revenue growth during the fourth quarter (relative to 2019) of approximately 20%
Focus on fashion
In its non-sports operations in the domestic market, it attracted and retained new digital shoppers and, since reopening, trends have been very similar to JD, with significant pent-up demand helping sales to exceed pre-pandemic levels. As with JD, footfall subsequently slowed, although continued conversion growth has helped Tessuti and Scotts stores continue to perform positively.
It continues to invest in physical stores and e-stores, with the opening of a new Tessuti flagship store in Liverpool and Mainline Menswear’s digital revenues growing by more than 75% compared to pre-pandemic levels.
Drapers has also reported that the company will close some of its high-end Choice stores and reopen them in new larger spaces under the Giulio name. The firm has not confirmed this move as yet. It acquired independent designer retail business Giulio in 2019 after taking control of Choice a year earlier.