JD Sports Fashion PLC’s latest earnings report continues is new proof of the staying power of fashion athleticwear amid the challenging retail environment in the United Kingdom.
The European sports giant saw shares rally 8% following half-year revenues that rose 47.4% to 2.72 billion pounds, with pre-tax profits that grew 6.6% to 129.9 million pounds, or earnings of 12.57 pence on an adjusted basis.
The results for the period ended Aug. demonstrate JD’s strength during turbulent times for Britain’s retail industry, which has struggled in the face of uncertainty over Brexit — which has dragged down consumer spending — as well as the rise of e-commerce and concerns over a global economic slowdown.
In a statement, executive chairman Peter Cowgill said, “Against a backdrop of widely reported retail challenges in the U.K., 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 theater with innovative digital technology.”
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The Greater Manchester-based company also pointed out its investments in stores, digital platforms and advertising, as well as the sales performance of gym clothing and its premium-branded businesses.
In March, JD announced that it would acquire the remaining shares of Footasylum PLC — a month after upping its stake in the beleaguered chain — in a cash deal worth 90.1 million pounds.
The company has also reaped the benefits of its $558 million takeover of United States-based athletic retailer Finish Line Inc. last March. The deal allowed the British powerhouse to gain a major foothold in the American sportswear market and enabled the struggling Finish Line to compete more effectively with Foot Locker and other athletic goods sellers.
In its half-year report, JD noted Finish Line’s operating profits of 34.7 million pounds — compared with last year’s 4.8 million pounds for the seven weeks post-acquisition — and a like-for-like sales gain of 5% across its stores and website.
JD recently shuttered 10 underperforming Finish Line stores, including the conversion of a former outpost in Minnesota’s Mall of America that became the sixth JD location in the U.S. It expects to close a similar number of Finish Line stores in the second half and remains on track to open a JD flagship in New York’s bustling Times Square area next spring.
For the full year, JD expects pre-tax profits to hit the mid-point of market expectations, versus the top end of forecasts, which range from 402 million pounds to 424 million pounds.
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