Shares in sportswear specialist JD Sports Fashion (JD.) sprint 4.7% higher to 369.6p as record full year results buck the fairly miserable retail environment. The impressive figures also demonstrate that Brits continue to love their leisurewear, or athleisure clothing, as the company calls it.
The Bury-headquartered trainers-to-gym kit seller ‘remains confident in the robustness and international potential of the JD proposition’ with management ‘excited by the major developments ahead’.
BUCKING THE GLOOM
Guided by executive chairman Peter Cowgill (pictured below) and astute numbers man Brian Small, the sports, fashion and outdoor brands purveyor is bucking an otherwise gloomy trend on the UK high street.
Results highlights for the 53 weeks ended 3 February are spearheaded by a 26% surge in profit before tax and exceptional items to £307.4m on sales up by a third to approaching £3.2bn.
No-nonsense Cowgill reports further growth in group like-for-like store sales of 3%, complemented by 30%-plus growth in like-for-like website sales, demonstrating the strength of its multi-channel offer.
The core UK & Ireland sports fashion stores remain the foundation of JD Sports’ success, although the retailer also reports an encouraging performance from its Outdoor division.
Boosted by a first full year contribution from prior year addition Go Outdoors, divisional sales more than doubled o £416m and operating profit powered higher from £1.2m to £8.8m, ‘our businesses performing strongly through the winter months’.
SUSTAINED GROWTH
‘This is an excellent result demonstrating our capacity for continuing growth in both existing and new markets, and the strength of our offer in store and online,’ enthuses Cowgill.
‘After delivering a headline profit of £100m for the first time in the year to January 2015, the headline profit has increased by more than £200m over the subsequent three years, a rise in excess of 200%. This sustained growth could not have been achieved without a relentless and ongoing focus on a number of key principles which ensure we remain the undisputed consumer destination of choice for sport lifestyle footwear and apparel.’
GOING GLOBAL
Excitingly, the international development of the JD fascia continues, the retail star turn expanding in Europe and elsewhere, having opened first stores opened in Australia and South Korea and Finland for instance.
Last month, JD Sports announced the near-£400m acquisition of NASDAQ-traded footwear seller Finish Line, a deal that will transform JD Sports’ growth prospects in the US, the world’s biggest global market for sport lifestyle footwear and apparel.
Part-owned by Mike Ashley’s Sports Direct International (SPD), Finish Line trades across 44 US states and Puerto Rico, boasts an established online business and is also the exclusive retailer of athletic shoes for Macy’s.
Theoretically the acquisition could increase JD’s strategic importance to major international brand partners including Nike and Adidas.
‘JD remains a tightly managed company with good cost and stock control and strong cash generation,’ writes Shore Capital’s retail guru Clive Black. ‘The business continues to benefit from the online push and strength of its core proposition together with international expansion. This is a confident management team with strong momentum across the business who are starting to harness the potential international opportunity. We reiterate our buy rating.'
