JD Sports posts drop in first half profit
JD Sports has posted a drop in first half pre-tax profit after the retailer incurred increased costs due to the coronavirus pandemic.
In the six months to 1 August, pre-tax profit declined to £41.5 million from £129.9 million in the corresponding period in the previous year.
Meanwhile, revenue fell to £2.54 billion from a previous £2.71 billion after the impact of store closures during the Covid-19 lockdown.
Peter Cowgill, JD Sports executive chairman, said: “Ultimately, given the unique circumstances of this trading period, we are reassured by the strength of the JD brand as demonstrated by the retention of more than 90% of the total revenues. However, it should be recognised that this has necessitated additional costs principally relating to the provision of enhanced health and safety measures, in all areas of the business, together with increased costs of online fulfilment, including performance marketing.”
The company said it has been encouraged by its performance since stores reopened after lockdown, although footfall has remained comparatively weak.
Cowgill added: “The recent strengthening of measures in many countries and the subsequent temporary closure of some stores reminds us that Covid-19 remains an ongoing challenge. Nonetheless, we remain absolutely confident in our strengths in consumer engagement, key brand relationships and globally consistent multichannel retail standards. These, combined with an agile operational infrastructure, provide us with a robust platform for further positive development.”
Despite the drop in profit, the company has reinstated its guidance for the full year.
Cowgill said: “Assuming a prudent but realistic set of assumptions for the peak trading period that reflect an uncertain outlook for consumer confidence, the ongoing challenges of attracting footfall to stores and the potential for further operational restrictions; we would presently anticipate delivering a headline profit before tax for the full year of at least £265 million when calculated under IFRS 16 ’Leases’.”
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