JD Sports Fashion Plc (LON:JD), the leading retailer of sports, fashion and outdoor brands, has announced its Final Results for the 52 weeks ended 30 January 2021 (2020: 52 weeks ended 1 February 2020).
Group Highlights
· Significant retention of sales and profitability through an unprecedented period of global uncertainty and multiple periods of temporary store closures reflects:
o The strength and premium position of the JD brand and consumers’ affinity to it
o Relevance of product offer to style conscious consumers
o Agile multichannel ecosystem built up over a number of years
o Infrastructure flexibility
· Transformational developments in the United States:
o Exceptional trading performance in the Finish Line and JD fascias in part driven by the enhanced consumer demand consequent to the US Government stimulus
o First flagship store for JD opened in Times Square, New York with a positive reaction from customers and international brand partners
o A further 37 former Finish Line stores converted to JD with 49 stores trading as JD at the end of the year
o Acquisitions of Shoe Palace (based in California) and, subsequent to the year end, DTLR (based in Maryland) complement the strengths of the existing Finish Line and JD fascias and significantly enhance the Group’s exposure to key consumer demographics on the West Coast and East Coast of the United States
· International development of JD in other markets continues to progress positively although the number of new stores slowed temporarily as a consequence of restrictions on construction and fit out works with:
o Net increase of 31 JD stores across Mainland Europe
o Net increase of five JD stores in the Asia Pacific region
· Outdoor business returned to profitability in the second half of the year with a strong performance in key categories
· Physical retail in England and Wales now re-opened
· Physical retail in United States has largely traded free from Covid related restrictions in the new financial year to date
· Net cash at the period end of £795.4 million reflects the high point of the working capital cycle and is stated before:
o Completed acquisitions in the new year to date with aggregate cash consideration paid of approximately £380 million
o Reversal of temporary factors, including agreed tax deferrals and rent deferrals across our global businesses, totaling in excess of £125 million
· Ongoing significant investments in logistics to mitigate against the risks associated with:
o Requirement to operate with social distancing
o Duties payable consequent to the form of the UK’s trade agreement with the European Union
· Dividend payments resumed with final dividend of 1.44p per share proposed which recognises the significant contribution to profitability from the Group’s international operations, particularly those in the United States
Peter Cowgill, Executive Chairman, said:
“The global COVID-19 pandemic and, more recently, the UK’s formal exit from the European Union have presented a series of unprecedented challenges which have severely tested all aspects of our business including our multichannel capabilities, the robustness of our operational infrastructure and the resilience of our colleagues. However, at all times, the Group has strived to do the right thing for all stakeholders.
“Notwithstanding these well publicised challenges, a number of positive themes have been increasingly apparent through the year which gives us confidence that, as we begin to emerge from the worst of the disruption, JD is at the pinnacle of the global sports fashion industry. We have a market leading multichannel proposition which continues to enhance its relevance to consumers and has the necessary agility to progress in an environment where the retailing of international brands may see permanent global structural change.
“Our positive outlook is reflected by the fact that, even with the unique circumstances of store closures for a substantial period of the year, the Group has retained substantially all of its record profitability from the prior year with a profit before tax and exceptional items of £421.3 million (2020: £438.8 million). We are indebted to all of our teams in our different territories for their determination and resilience in dealing with the potentially life changing challenges of the past year and we fully acknowledge the contribution from all of our colleagues in the delivery of this excellent result.
“Our recent completed acquisitions of Shoe Palace and DTLR in the United States together with the conditional acquisition of Sizeer in Central and Eastern Europe are important steps in our evolution which will transform our consumer connection in these markets and further develop our key brand relationships.
“Whilst we must recognise the substantial level of temporary store closures to date and ongoing, we remain confident that we are well placed to benefit from the opportunities that prevail and, at this early stage, our current best estimate is that the Group headline profit before tax for the full year to 29 January 2022 will be in the range of £475 million to £500 million.”
