JD Sports (LON: JD) has reported a fall in profits for the first six months of the year.
The group has also warned of a continued hit to sales as a decline in footfall is hitting the fashion retailer.
Pre-tax profit slumped £96.7m from £158.6m, whilst revenue was down 6.5% over the same period.
Since stores has reopened post-lockdown, sales have increased by 20% compared to the same period last year, however, the group has said the costs of health and safety measures have hit profits.
JD expects full-year profits of £265m – up from the previous expectations of £96m-206m.
JD shares rose over 8% in early trading. They have fallen 14% this year, however, have recently rallied back to stronger figures.
On the fall of sales from the post-lockdown boost, the group said:
“That boost was generally short lived with footfall into physical retail continuing to be significantly weaker than historic levels in all of our geographies but particularly across Europe.”
“Some of the weakness in footfall has been offset through better conversion and higher average transaction values as those consumers who visited physical retail did so with greater intent.”
“Nonetheless, we remain absolutely confident in our strengths in consumer engagement, key brand relationships and globally consistent multichannel retail standards. These, combined with an agile operational infrastructure, provide us with a robust platform for further positive development.”
Analysts from CMC Markets said: “While JD Sports’ share price might be down on the year, it’s having a remarkable run of form right now. In the 31 days to 4 September, JD Sports’ share price soared 7.5% and, with a [Relative Strength Index] of 72, it seems that there could be more upwards momentum left in the stock.”
JD Sports shares (LON: JD) are currently trading +6.99% at 775.26 (0859GMT).
