Revenues jumped by 18.5 percent at JD Sports Fashion for the first half of the fiscal year ended July 31, reaching £383.9 million (€451.4m-$601.2m). While the gross profit margin edged up by only 0.2 percentage points to 48.2 percent, the operating profit leapt by 29.6 percent to £18.6 million (€21.9m-$29.1m). Profit before tax also skyrocketed, up by 64.3 percent to £16.6 million (€19.5m-$26.0m). After-tax profit was up by an impressive 70.3 percent to £11.7 million (€13.7m-$18.3m).
The British retail group’s comparable store sales rose by 2.8 percent in the six months, broken down into a 3.9 percent increase in the sports division and a 3.8 percent drop in its fashion stores. The good results continued into the second half, with comparable store sales up by 2.7 percent in the four weeks to Aug. 28. For this period, sports was up by 2.1 percent and fashion grew by 7.1 percent. Given this, the company feels that the fashion fascias will contribute to growth going forward. JD also said that Chausport, the French company it bought in May 2009, had improved its performance thanks to JD’s purchasing capabilities.
In JD’s sport retail segment, total revenues increased by 9.7 percent to £296.2 million (€348.4m-$464.2m). The operating profit before exceptional items rose by 23.4 percent to £21.6 million (€25.4-$33.8). It is the core of the group’s profitability, and the addition al Chausport, as well as planned expansion outside the U.K. home market, should even enhance its role.
Fashion retailing saw revenues grow by 14.8 percent to £51.1 million (€60.1m-$80.1m), but the segment generated operating losses of £2.0 million (€2.3m-$3.1m), compared with a loss for the same period last year of £2.7 million.
JD’s expanding distribution business had a huge 285 percent gain in revenues to £36.6 million (€43.0m-$57.3m), largely due to acquisitions, but it still had a £1.0 million operating loss (€1.2m-$1.6m), a worsening of the £400,000 loss in 2009. The company blames this on losses incurred in Kooga’s quietest trading period of the year, as well as ongoing investments to get Gethtelabel.com up and running. Getthelabel.com’s sales progress is said to be “encouraging,” JD says it will probably not be profitable for a couple more years. Canterbury, the rugby brand, saw a small profit for the six months, and this brand is focusing on expanding its global network and offering more fashion-centric products in the U.K.
Broken down geographically, sales in the U.K. rose by 11.7 percent to £342.5 million (€402.9m-$536.7m). In the rest of Europe they climbed by 54.3 percent to £26.8 million (€31.5m-$42.0m), and in the rest of the world they jumped to £14.6 million (€17.2m-$22.9m) from just £16,000 last year.
As of July 31, JD had 423 stores total in its sports fascia, up from 420 on Jan. 30. In fashion, there were 107 stores, four more than at the end of January.
For the rest of the year, JD is up against a tough comparison period, and considers that the economic outlook should remain uncertain. It plans to release an interim management statement in November to assess the performance during the third quarter.
