JD Sports said its profit before tax increased to £439.5m for the six months ended July 31
JD Sports has on Tuesday confirmed its earnings for H1 as demand for sportswear slowed down as lockdowns eased.
The UK sportswear brand has not paid out a dividend this time around, suggesting that it will offer a more sizeable full-year dividend.
JD Sports said its footfall levels were low across a number of countries, while supply chain disruptions were making it difficult to cater for demand in specific categories.
JD Sports said its profit before tax increased to £439.5m for the six months ended July 31, up from £61.9m in 2020 and £158.6m the year before.
The company forecast its pre-tax profit for the full year ending January 29 to be at least £750m.
“JD Sports’ results show it continues to lead the way as a high-quality business thanks to its distributing power in the growing and competitive athleisure market,” said Amisha Chohan, equity research analyst at Quilter Cheviot.
“It has certainly been helped along the way by the stimulus provided to US households, however, it is not just reliant on the overseas market as the UK continues to perform well. Overall Group sales are up by more than 50% to £3.9bn and operating profit up almost 400% to £239m, year on year. This is a huge beat against market expectations and highlights a business that has managed the pandemic well.”
“While the reopening and end of government support schemes could dent confidence going forward for many retail businesses, JD Sports should continue to benefit as demand for sneakers and athleisure remains strong and will endure as a tailwind over the near-term. It is no surprise, therefore, that the group now expects profit before tax for the full year to be at least £750m, compared to previous guidance of at least £550m and a 25% beat against market expectations.”
The pandemic has presented JD Sports with an opportunity too.
“Many retailers still suffer from the same fragile financial structures they had pre-pandemic and will come under intense pressure. JD Sports is well-positioned to consolidate the market and with a strong management track record and “trusted partner” relationships with the premium brands such as Nike and Adidas, the path to further growth remains clear,” said Chohan.