The owner of JD Sports, Blacks Leisure and Millets has improved his annual profit expectations by £ 150million after sales were boosted by US buyers spending their Covid budget stimulus checks on trainers and sports equipment.
The retail group, which has more than 3,000 stores in the UK, US, Europe and Asia, raised its target for the year to £ 750million after its pre-tax profits reached a record £ 364.6million in the six months to July 31, nearly nine times. that of the same period a year ago, when retailers were hit by blockades on streets around the world. Sales rose 56% to £ 3.9 billion in the half-year.
JD Group said all U.S. businesses have benefited from the U.S. government’s fiscal stimulus package that provides direct payments to individuals, much of which is spent in stores. Group executive chairman Peter Cowgill said JD outlets have performed particularly well because of their understanding of their customers’ “aspirations and expectations”.
Profit before tax, before exceptional items, more than tripled to £ 245m in the US from £ 73m partly due to the acquisition of the Shoe Palace and DTLR businesses, adding to its points of Finish Line and JD sales.
“It is clear that the United States is becoming an increasingly important territory for the group, the progression and development in this country having a major impact on both the group’s overall performance and its position with international brands. “the company said.
Profits from core UK and Ireland businesses more than tripled to £ 171million from £ 52million as the company said it kept sales through digital channels thanks to to street closures, as shoppers sought comfortable clothing for working from home and benefited from a pushback. request when the stores reopen.
Cowgill said the results were “extremely encouraging,” adding: “The group continues to demonstrate exceptional resilience in the face of the many challenges arising from the continued prevalence of the Covid-19 pandemic in many countries, from the pressure widespread on international logistics and other supply chains. challenges, significantly lower levels of footfall in stores in many countries after the reopening and the lingering administrative and financial consequences resulting from the loss of duty-free and frictionless trade with the EU. “
Jonathan Pritchard, analyst at Peel Hunt, said JD’s first half performance was “beyond even the biggest bulls’ expectations.” He wrote: “The United States has been at the heart of the force, with stimulus checks leading to comparable results. [sales]. However, he said JD’s business in Europe faced more challenges as stores opened later and import duties were imposed on goods sent from the UK.
Cowgill added that JD was “generally encouraged” by his performances in the weeks that followed at the end of July. “We remain absolutely convinced that our inherent strengths in retail dynamics and operations provide us with a solid platform to progress further,” he said.
However, the company said it was not paying a semi-annual dividend to shareholders, instead promising a potentially larger payout over the full year “taking into account the consequences of any potential new restrictions on trade.”