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Summary
- JD Sports Fashion expects headline profit before tax will be between £475 million to £500 million for the full year to 29 January 2022.
- The fashion retailer announced higher revenue of GBP 6.17 billion, even during the ongoing pandemic accompanied by multiple periods of store closures.
Rising optimism of the successful vaccination drive in the United Kingdom has now started reflecting on the forecast of the businesses, the latest being the leading retailer of sports and outdoor brands JD Sports Fashion PLC (LON: JD.), which not only reported significant preservation of revenue & profitability for the 52 weeks ended 30 January 2021 but has also said that the group’s headline profit before tax will be between £475 million to £500 million for the full year to 29 January 2022.
The leading retailer of sports and outdoor brands announced higher revenue of GBP 6.17 billion, even during the ongoing pandemic accompanied by multiple periods of store closures. Revenue numbers reflected a rise of 0.9 per cent from 2020 levels of GBP 6.11 billion, though statutory pretax profit of GBP 324.0 million, were 7.0 per cent below 2020’s level of GBP 348.5 million.
With Physical retail opening up in England and Wales, their Outdoor business returned to profitability in the second half and posted a strong performance in key categories. The group had mentioned experiencing a robust demand over Christmas with sales rising over 5 per cent in the second half.
The Key Financial Highlights -
(Data source: company release)
Road ahead
The management now anticipates headline pre-tax profit (before exceptional items), to range from GBP 475 million - 500 million in this year up to January 2022. This it feels, would mainly be possible due to the continued global expansion projects and acquisitions. International developments of JD in other markets have made favourable progress. It has seen Transformational developments in the United States, driven by the enhanced consumer demand consequent to the US Government stimulus and 37 former Finish Line stores getting converted to JD by the end of the financial year. All across Mainland Europe there was an increase of 31 JD stores and there was addition of 5 in the Asia Pacific region. It’s premium position amongst consumers is clearly visible.
The fashion-based retailer was having a net of GBP 795.4 million cash at the reported period end, reflecting a high point of its working capital cycle. Management clarified that with the Ongoing significant investments in logistics to mitigate the risks associated with social distancing norms and Duties payable consequent to Brexit, it was only possible to pay a final dividend of 1.44p per share.
JD group’s management also noted that though it was offered 300 million pound of lending assistance, under the UK government's Covid Corporate Financing Facility Scheme, which closed on March 22, but did not availed.
Also Read: Why JD sports is facing a whopping Brexit-induced cost of £10 mn
As the company has not mentioned of returning any of the UK government's financial, it now seems to be in an enviable position, with a lot of cash to spend on acquisitions as required and strong relationships with key brands.
The strong earnings were visible on stock performance as well, JD. Shares were up by 2.98 per cent at GBX 940.80 at the market close on 13 April 2021.
