JD Sports Fashion pre-tax profit surged 61% to £61.4m in the year to January 30 but sales at its fashion fascias have slowed since the new financial year.
JD Sports Fashion said that current trading was “encouraging”, with retail like-for-likes ahead 2% over the 10 weeks to April 10. However like-for-likes at its Bank and Scotts chains, were down 3.5%, but this was partly offset by a 2% improvement in gross margin.
Chairman Peter Cowgill said: “Trading in the 10 weeks to April 10 2010 has been encouraging with UK and Ireland retail like-for-like sales up 2% (sports fascias 3%; fashion fascias -3.5%) on an underlying basis taking into account the change in the timing of Easter and school holidays. Although like-for-like sales are lower, the performance of the fashion fascias has benefitted from a 2% improvement in gross margin in the same period.”
Over the full year, JD Sports Fashion’s revenue climbed 15% to £770m, but this included £48.1m in additional turnover from acquisitions including the rugby brand Canterbury Europe and French retailer, Chausport.
Sales at the sports division, which includes the core JD chain, increased 10% to £615.5m in the year, while fashion fascia Bank experienced a 4.7% uplift in revenue to £82.8m At its other fashion fascia, Scotts, total sales declined from £32m to £31.8m.
Gross margin remained flat at 49.3% in the year, held back by lower margins realised in Chausport and its distribution business.
JD Sports Fashion said it remained cautious about the outlook for this year.
Cowgill said: “Such sustained performance, in the face of less than favourable economic conditions and exchange rates, reflects the strength and uniqueness of our brand and fascia offers as well as the strength of our management teams.
“The board remains focused on continuing to deliver operational and financial progress for the group over the long term. Opportunities for profit growth overseas, the rollout of our principal fashion fascia, development of our differentiated and own brand proposition, and growth in our distribution business all help to reduce threats to group profitability and give us the opportunity to maintain the positive momentum in our business.”
The retailer made a “significant” investment in the store portfolio in the year, but said it has become “much more difficult” to dispose of underperforming stores, due to the economic climate.
The retailer operates from 345 stores across its JD and Size? fascias, 103 stores across its fashion fascias and 75 at its Chausport business.