Shares in JD Sports fell on Friday morning after the retailer revealed a drop in profits, despite the group boasting a “strong performance in a challenging market”.
The sportswear retailer’s revenue rose 2.7 per cent to £10.4bn in the year to January 27, while like-for-like organic sales grew 3.8 per cent.
JD Sports said it had been helped by the sale of five brands (Tessuti, Scotts, Choice, Giulio and Cricket), all sold to Frasers Group, as well as getting a boost from the opening of more than 200 new stores.
Challenging market: JD Sports said its sales had been resilient despite headwinds
Shares in JD Sports They were down 10.3 per cent to 120p on Friday morning.
During the same period, JD also announced proposed acquisitions of French brand Courir and US retailer Hibbett.
However, its UK business suffered from sales and was the only region not to increase revenue during the year, with sales falling 8.3 per cent to £3.51bn. .
Footwear continued to perform well with sales growth of 8.2 per cent to £5.92 billion, helping to offset a drop in demand for autumn and winter clothing amid the warmer weather. tempered.
Pre-tax profit before adjusting items fell 7.5 per cent to £917.2 million, which JD Sports said reflected “continued investment in people, stores, systems and supply chain.” .
The retailer said it was lower than expected thanks to lower revenue in the second half of the year and investments for future growth.
Chief Executive Regis Schultz said: “We have started the new financial year with the first quarter in line with our expectations in a volatile market and are on track to meet our full-year earnings guidance.”
“Looking ahead, we have a solid business model and a clear strategy to deliver long-term growth and value creation for our shareholders.”
The retailer proposed a final dividend of 0.6p, bringing the total proposed payout to 0.9p.
Analysts at Peel Hunt said that “the first quarter is always likely to be the weakest, and with some product innovations emerging, the balance of the year should be more positive.”
They added: “There is nothing in the preliminaries that would deter a marginal buyer… Even after a small run, the stock continues to reflect bad news rather than good, and that, in our view, offers a very good opportunity.” .
