JD Sports’ profits for the year ending February 2 have fallen 18 per cent to £55.1 million, due mainly to disappointing sales at Blacks and Millets.
The retailer’s outdoor division made a loss of £14.9 million during the period.
In contrast, its sports fascias (JD, Size?, Chausport, Sprinter and Champion Sports) made a pre-tax profit of £4.7 million.
Group revenue for the year was up 19 per cent to £1.25 billion; £854 million came from its sports business.
Despite a difficult year for JD’s outdoor division, the company said it now plans to retain 140 Blacks and Millets stores (80 Blacks and 40 Millets) under separate management teams.
It originally stated Millets fascias would be phased out.
“The core Sports fascias in the UK continue to produce excellent results and provide the group with a very solid foundation for ongoing profitability and cash generation,” says executive chairman Peter Cowgill.
“We are pleased overall with the start that we have made to the new year.
“A very considerable amount of reorganisation in both outdoor retail and our warehousing and distribution operations is now behind us and this should benefit trading in the balance of the year.
“The group is exceptionally well positioned with its retail proposition, financial resources and extended management experience to take advantage of opportunities both in the UK and internationally.
“While the board recognises that recent acquisition activity has impacted on short term returns, it remains confident that the group is well positioned to deliver earnings growth and increased shareholder returns over the longer term.”
Dan Coen of restructuring firm Zolfo Cooper says that while JD Sports’ results may not be top of the league table, the retailer is rightfully persevering with a bullish growth strategy.
Coen explains: “Last year’s acquisition of Blacks continues to weigh down on the group’s overall performance, but restructuring of the outdoor arm is due to start paying off this year.
“JD Sports is expanding internationally and has been busy picking up diverse brands, such as online shoe retailer Cloggs.
“These international and multichannel developments mean that JD Sports will be set for success and chief rival Sports Direct will have a fight on its hands for sports supremacy.”
