JD Sports Fashion’s profit before tax and exceptional items soared by a record 82% to £46.6m in the 26 weeks to August 1, but the company has warned the weakening euro is an “escalating issue”.
Total sales grew 21% to £809.9m. Like-for-like sales across the group increased by more than 10%. The struggling outdoors segment, which includes Blacks and Millets, showed “encouraging progress”.
The sports fashion segment, including JD and Size?, performed strongly. However, as expected, its gross margin fell below the previous year’s level, reflecting the impact of the weaker euro on JD’s euro-denominated businesses.
The company said: “The financial impact of this may currently be small in the context of overall earnings but it is an escalating issue as we expand our presence in Europe. We are maintaining a long term view on our European development project and will continue to address the issue both internally and externally with our international brand partners.”
The group’s international rollout continued, with 27 stores opening across Europe. It opened the largest JD store to date on Oxford Street in London in July. The new flagship has nearly 22,000 sq ft of retail space set over three floors.
Executive chairman Peter Cowgill said: “Our principal sports fashion fascias continue to perform strongly with like-for-like sales growth in excess of 10% which, when measured against particularly strong and challenging comparatives, is a very pleasing performance.
“In an extremely competitive market for sports fashion footwear across Europe, we must acknowledge that the levels of organic growth that we have seen over the last two years are unlikely to continue indefinitely, albeit the JD brand continues to strengthen and further opportunities prevail.
“Our current successful exploitation of these favourable market conditions reflects investments that we have made over a number of years in developing our multichannel retail proposition and driving improved buying, merchandising and retailing disciplines. We continue to invest heavily in these areas.”