JD Sports defies retail gloom with jump in like-for-likes & profits

1988
JD Sports interim results: like-for-likes surge 10%, sales almost double and operating profit surges
JD Sports defies high street gloom with revenues almost doubling.
// JD Sports half-year revenues jumped 47% to £2.7bn on the back of a 10% surge in like-for-like sales
// EBITDA more than doubled to £402.9m; operating profit surged 61% to £199.8m; & pre-tax profit increased 6.6% to £129.9m
// JD Sports to adopt IFRS 16, a new accounting standard requiring leases to be recognised as a liability

JD Sports has defied the tough trading conditions plaguing the retail industry by posting a surge in like-for-like sales as well as significant jumps in profits and revenue.

In its half-year report for the 26 weeks ending August 3, the retailer saw revenue surge 47 per cent year-on-year to £2.7 billion – driven by a 10 per cent jump in like-for-like sales across the UK and Ireland stores.

The retail giant – which operates the flagship JD Sports chain and Finish Line in the UK and abroad, along with Tessuti, Blacks, Go Outdoors and several others – also saw EBITDA more than double from £171.8 million to £402.9 million.

Meanwhile, operating profit skyrocketed 61 per cent year-on-year to £199.8 million, and pre-tax profit increased 6.6 per cent to £129.9 million.

However, on underlying basis EBITDA increased by 37 per cent year-on-year to £235.2 million and profit before tax and exceptional items increased 36 per cent to £166.2 million.

JD Sports said it would adopt IFRS 16, a new accounting standard requiring leases to be recognised as a liability in its balance sheet, with effect from the current trading period.

The move means there would be a limit on the rise in profits over the full year.

JD Sports executive chairman Peter Cowgill said he was pleased with customer reaction to improvements to stores and online.

“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 per cent with an improved conversion reflecting consumers’ increasingly positive reaction to our elevated multichannel proposition,” he said.

He added: “JD also continues to gain momentum in Europe with a further double digit increase in total like-for-like sales and a net increase of 23 stores in the period.

“We are pleased by the continued positive trends to date in the second half in Sports Fashion whilst recognising the tougher comparatives ahead.

“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.

“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.”

JD Sports entered the FTSE 100 for the first time earlier this year.

The retailer’s market value of £6.3 billion is more than four times that of Sports Direct, its closest and biggest rival.

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