Tiso owner JD Sports limbers up with pandemic-busting profit projection
JD Sports Fashion, the high street giant that has a controlling stake in Scottish outdoor retailer Tiso, expects profits to rebound more strongly than expected over the year ahead as its stores reopen following lockdown.
The sportswear retailer upped its outlook for the year to January 2022, forecasting that profits will push ahead of pre-pandemic levels as restrictions ease – to between £475 million and £500m.
The firm, which has become one of the most familiar and successful names on the UK high street, had previously predicted profits of between £440m and £450m for the current financial year.
Business has proved resilient during the pandemic thanks to a successful shift to online selling and a raft of acquisitions in the UK and overseas.
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The group reported underlying pre-tax profits falling to £421.3m for the year to January 30 from £438.8m the previous year. But this beat the group’s recently upgraded forecast for at least £400m.
On a statutory basis, pre-tax profits fell 7 per cent to £324m, though revenues edged up to £6.17 billion from £6.11bn.
The firm said it was able to retain around 70 per cent of its UK revenues across its JD and Size brands by shifting online during the first lockdown last spring, which rose to 100 per cent through the November lockdown.
It also hailed an “exceptional trading performance” in the US as economy-boosting measures helped spur on consumer demand. JD has been expanding rapidly in the US through acquisition, recently snapping up Shoe Palace following a deal to buy the Finish Line shoe-store chain in 2018.
Peter Cowgill, executive chairman of JD Sports 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.
“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.”
Freetrade’s senior analyst Dan Lane noted: “There haven’t been many reasons to get dressed up over the past year. That has clearly made spending a bit more on our athleisure wear an easier decision.
“JD fans clearly still have an appetite for the brand, which has helped to keep the company’s lights on during lockdown.
“A new store smack bang in New York’s Times Square is a fairly big signal of JD’s intentions in the States. Having raised £464m to finance its mission to crack America, arguably this is what shareholders will be watching, rather than sighing over the year that was.”
Adam Vettese, analyst at investment platform eToro, added: “The strength of JD’s online presence helped it maintain and even grow revenue, helping it catch sales that would have otherwise been lost to rivals.
“The sportwear giant predicts profit in the range of £475-500m for this year, which seems plausible given the strength of its performance throughout the pandemic.
“But it will rest largely on whether sportswear will remain a priority for many people now that shops have reopened in many markets.”