Tiso owner JD Sports warns profits to turn flat as consumers feel pinch

Retail giant JD Sports Fashion has unveiled a bumper £947.2 million annual profit haul, but warned that earnings are likely to remain flat in the current financial year as the cost-of-living crisis bites.

The sports clothing and trainers chain, which has a ­controlling stake in ­Scottish outdoor retailer Tiso, saw underlying pre-tax profits more than double from £421.3m the previous year.

Statutory pre-tax profits jumped to £654.7m in the year to January 29 from £324m the previous year as demand for sports and leisure wear showed no sign of slowing.

But the firm said profit growth is expected to be held back in the year to next January, due to pressures of the cost-of-living crisis in the UK and wider economic woes.

Helen Ashton, interim chairwoman of JD Sports, said: “Whilst we are encouraged by the resilient nature of the consumer demand in the current year to date, we remain conscious of the headwinds that prevail at this time, including the general global macro-economic and geopolitical situation.

“Against this backdrop, the board believes that the headline profit before tax and exceptional items for the year end January 28 2023 will be in line with the record performance for the year ended January 29 2022.”

She said the search for a new chief executive is continuing, with a “number of high-calibre candidates at different stages of consideration”. The company’s hunt for a new non-executive chairman is also “progressing at pace”, she added.

In February, JD Sports was fined £4.3m by the Competition and Markets Authority (CMA) for exchanging information with Footasylum, which it had agreed to buy at the time for £90m.

JD has become one of the most familiar brands on the UK high street while also running a successful online operation.

The firm’s woes have continued, with the CMA finding provisionally earlier this month that it conspired, together with sporting goods firm Elite Sports and Rangers Football Club, to fix prices of Rangers club clothing merchandise.

JD’s results also showed that annual group revenues leapt to £8.6 billion from £6.2bn the previous year.

It said sales for like-for-like businesses in the current year so far are 5 per cent ahead of a year earlier, despite shortages of key footwear due to supply chain disruption.

Ashton added: “We are particularly encouraged by the strong performance from the group’s banners in North America. It is increasingly evident that the group’s progress in North America, and the United States in particular, is having a long-term positive impact both on the group’s overall performance and its relationships with the international brands.”

Eleonora Dani, an analyst at brokerage Shore Capital, noted: “To say that the recent and sudden departure of Peter Cowgill, executive chairman, had investors spooked would be an understatement.

“This, in fact, has compounded concerns around the weakening consumer confidence and pressure on athleisure in favour of occasion and workwear trends. However, the group highlights that trading year-to-date has been reassuring, with revenue +5 per cent year on year on a like-for-like basis, achieved despite the global shortfall in the supply of certain key footwear styles (this should progressively improve throughout the year).”