JD Sports full-year profits soar 27.3% driven by growth in core fascias

Group revenue at JD Sports was up 5.7% to £1.33bn in the 52 weeks to February 1, against a 53-week period last year.

Like-for-likes across the UK and Ireland retail fascias increased 6.7%.

JD reported a strong performance across its sports fascias, which include JD and Size?, where gross margins were maintained and operating profit before exceptional items jumped 20% to £93.4m.

However, both its fashion and outdoor businesses remain loss making.

The retailer said the turnaround of its outdoor business, largely comprising Blacks and Millets, is “progressing”. Both fascias delivered a breakeven result, before exceptional items, in the second half compared with a loss of £4.9m in the second half of the previous year.

However, the retailer reported a “difficult” year in its fashion arm, with operating losses before exceptional items increasing to £6.4m compared with a £1.7m loss the year before. JD appointed Gwynn Milligan as managing director of its fashion business Bank in July to drive the turnaround.

JD executive chairman Peter Cowgill said: “I am delighted to report that our core Sports fascias delivered another year of substantial progress. It is particularly pleasing that they have produced a record result in our core markets in the UK and Ireland. These businesses continue to provide the foundation for profit and expansion in the group. We have also seen very positive developments for our Sport fascias in Europe.

“I am encouraged that the Blacks and Millets business achieved a significant improvement in the second half of the year and we expect continued progress in the new financial year.

“The group continues to be well positioned with its retail proposition, increased financial resources and extensive management experience to take advantage of opportunities both in the UK and internationally.”

JD launched in the Netherlands and Germany in the period, and said it has seen “very positive developments” across its Sport fascias in France and Spain.

It snapped up 15 stores in smaller regional towns and cities from a local fashion retailer in the Netherlands, which Cowgill said gives JD “critical mass” in the country. It also acquired the assets of the Isico partnership in Germany which, on acquisition, had 10 small stores primarily in the Berlin area. These stores will be converted to the JD fascia later in 2014.

Cowgill added: “We continue to look for further opportunities in international markets around the world where we can grow with the support of our key brands.”

The retailer remained confident it can revitalise its fashion arm after it was hit by “significant structural change” in the youth fashion sector. Cowgill said there has been a “significant market shift in favour of own brand and online fast-fashion retailers who have tapped into a price-competitive environment and a disposable fashion culture”.

He added: “However, Bank still had over 30 million visitors to its stores and over 11 million unique visitors to its website in the year and we strongly believe that, with the right proposition, Bank is capable of once again generating positive returns. We appointed a new managing director to the business during the year with her initial focus being to strengthen the proposition by offering faster own-brand fashion, better ranging and new brands.”

JD operates 563 sports stores, 149 fashion shops and 173 outdoor.

Cowgill added: “We are encouraged by the underlying trends to date across the principal parts of the business.

“Ultimately, the Group continues to be well positioned with its retail proposition, increased financial resources and extensive management experience to take advantage of opportunities both in the UK and internationally.”