JD Sports Fashion reports that its comparable store sales increased by 10.6 percent at its various sports retail chains in the U.K. and elsewhere in Europe during the five weeks ended Jan. 2, after a buoyant holiday season. The group thus predicts that its headline profit before tax and exceptional items for the current financial year is likely be up to 10 percent above market expectations of £136 million (€178.9m-$194.1m).
As the group pointed out, the increase comes after outstanding performances for its JD sports stores in the two previous years. Its upbeat statement contrasted sharply with the profit warning issued by Sports Direct International (SDI) a few days earlier, blaming weak retail conditions and unseasonal weather. JD Sports was lauded by analysts for its judicious mix of brands and partnerships with trendy labels.
On the other hand, the company said it would incur a one-off charge of about £12 million (€15.8m-$17.1m) this year, as it decided not go ahead with a project to replace its core systems. The group argued that it found ways to make the existing systems work more efficiently. The board further expects some write-downs in the carrying value of intangible assets once its year-end review is completed. Preliminary results are to be published in April.
Separately, Drapers reported that JD Sports was looking at a possible expansion into the U.S. and the Far East following the success of its development in Continental Europe, which will continue with the opening of additional stores, particularly in France, Germany and Spain. The British news service also said that the group was set to close Ark, a young fashion retail chain it bought out of receivership in 2013, with seven stores. JD told Drapers that it had begun consultations with all 104 affected employees . The retailer added that its fashion retail business would focus on its Tessuti and Scotts chains.
