JD Sports shares rise on sales and profit growth

JD Sports shares rise on sales and profit growth

JD Sports' Footasylum deal under additional investigation

JD Sports (LON:JD) posted a 10% rise in UK like-for-like sales on Tuesday in its half year results, sending shares in the retailer up by over 5%.

For the 26 weeks to 3 August, JD Sports revealed a like-for-like sales growth of over 10%, going against the well-reported high street gloom.

Group revenue for the leading trainer and sports fashion retailer jumped by 47% to £2.72 billion, compared to the £1.85 billion figure recorded the year prior.

JD Sports, who purchased its smaller UK rival Footasylum (LON:FOOT) in a £90 million deal earlier this year, said that Group EBITDA on a comparable accounting basis rose by 37% to £235.2 million, compared to £171.8 million from 2018.

Reported profit before tax increased by 6.6% to almost £130 million, the results also show.

JD Sports’ results defy the gloomy trading environment to have hit the UK high street. Over the past year, retailers have struggled to survive as job cuts and store closures prevail.

“Against a backdrop of widely reported retail challenges in the UK, it is extremely encouraging that JD has delivered like for like sales growth of more than 10% with an improved conversion reflecting consumers’ increasingly positive reaction to our elevated multichannel proposition where a unique and constantly evolving sports and fashion premium brand offer is presented in a vibrant retail theatre with innovative digital technology,” Peter Cowgill, Executive Chairman, commented in a company statement. 

“Notwithstanding the ongoing uncertainty with regards to Brexit, the Board is confident that, without the impact from the transition to IFRS 16, the Group would have been on track to deliver headline profit before tax for the full year at the top end of market expectations which currently range from £402 million to £424 million,” the Executive Chairman continued. 

“However, after adjusting for the impact of the transition to IFRS 16, we would expect to deliver results at the mid-point of expectations. We remain encouraged by our prospects for further growth.”

The retailer had already revealed strong results back in April when it posted an increase in its annual pre-tax profit, beating the UK retail gloom and remaining confident amid Brexit.

Shares in JD Sports Fashion plc (LON:JD) were up by 5.75% as of 11:01 BST Tuesday.