JD Sports expects yearly profits to be near the high end of forecasts

JD Sports’ annual earnings are expected to come in above expectations, following a “particularly impressive” peak over the Christmas period.

The sports fashion retailer announced on Wednesday that sales grew by more than a fifth in the last six weeks of 2022 and by more than 10 percent from August to December, compared to just 5 percent in the first half of the fiscal year.

It attributed the performance to improved product availability in North America, as well as continued momentum in other territories, including the UK and Europe.

Recently appointed CEO Regis Schultz also noted that many of the group’s retail and online brands achieved record sales during the holiday season.

Pre-tax profit for the year ended January 28 is now expected to be close to the current consensus high of £933m to £985m.

For the next 12 months, the group expects profits to exceed £1 billion, more than triple the amount it earned three years earlier when Covid-related restrictions severely affected trading.

“Looking forward, management is confident that consumers worldwide are more attracted than ever to JD’s differentiated proposition with its eye-catching in-store theater, advanced digital technologies, breadth in the brand portfolio and availability of key styles,” it told investors.

The positive trade update helped JD Sports Fashion Stocks becoming the best performing index of the FTSE 100 Index on Wednesday morning, rising 6.7 percent to 150.35p.

Since the start of the pandemic, the company’s revenue has skyrocketed thanks to the release of pent-up demand, a boost to consumer spending from the US government’s $1.9 billion stimulus package and multi-brand acquisitions.

Outlook: JD Sports expects profits to exceed £1bn in the next financial year, more than triple the amount it made three years earlier (Photo: England footballer Ella Toone)

Recent acquisitions include Spanish online sporting goods group Deporvillage, retro fashion retailer 80s Casual Classics and Crete-based retailer Cosmos Sports.

Sales have more recently been impacted by logistical issues affecting the availability of key footwear brands to North American customers, the lack of further US stimulus funding and rising inflation.

But the company’s rosy outlook has weathered the more pessimistic mood in the wider retail sector, where rising cost-of-living pressures and recession fears have already led to a slowdown in orders.

Fast fashion chain Boohoo, owner of Karen Millen and Dorothy Perkins, does is considering cutting more than 100 jobs in its London officeaccording to The Times.

The Manchester-based retailer struggled with a slump in demand as shoppers returned to buying in stores, along with higher freight costs and customer refunds.

Most of the planned layoffs are expected to occur in the group’s purchasing, design and e-commerce departments.

Mark Crouch, an analyst at trading platform eToro, said: “Retailers are fighting hard for business in the current environment, further boosting JD Sports sales by 20 percent year-over-year over the Christmas period. impressive.’

He added: “Like all retailers, however, they will be at the mercy of consumer spending, which is showing signs of faltering in the face of the cost-of-living crisis, but has not yet reached its maximum impact.

“An extended slowdown in consumer spending will clearly impact earnings growth, which is likely to be fairly flat over the next year.”