22nd Jun 2022 15:27
(Alliance News) - JD Sports Fashion PLC shares rose on Wednesday as investors lauded its late, but record breaking annual results, though the athleisure firm's outlook is just as difficult as everyone else's in the beleaguered retail space.
JD Sports shares were 7.0% higher at 114.32 in London on Wednesday afternoon.
"Despite several challenges including the previous loss of its CEO, global sports-fashion retailer JD Sport has delivered record profits in line with analyst expectations," Interactive Investor analyst Keith Bowman commented.
For the year ended January 29, the FTSE 100 listed firm doubled its pretax profit to GBP654.7 million from GBP324.0 million the year prior. Pretax profit before exceptional items more than doubled to GBP947.2 million from GBP421.3 million.
This was also more than double the company's previous record pretax profit before exceptional items of GBP438.8 million in its pre-Covid financial year ended February 1, 2020.
The record profit came on revenue that grew 39% to GBP8.56 billion from GBP6.17 billion. Revenue beat Barclays estimates of GBP8.23 billion.
"Profit for its expanded North American business has doubled whilst digital sales helped push a strong performance for its home UK & Irish business. Its Outdoor business also returned to profit during the year, group net cash increased, and the final dividend payment has been hiked by a fifth," Bowman added.
"Accompanying management outlook comments also offer some reassurance, with profit for the year ahead expected to match this year's record performance. Again, that broadly equals current City estimates."
The results were not without a hint of caution, however.
The company remains "conscious of the headwinds that prevail at this time including the general global macro-economic and geopolitical situation", Interim Chair Helen Ashton said.
For four months following the end of January, JD Sports said like-for-like sales were 5% ahead year-on-year. This came despite a global shortage of certain footwear styles, which the company expects to improve over the rest of the year.
Bowman added: "For investors, an uncertain economic outlook and a cost-of-living crisis for consumers provide a tough backdrop. The loss of the group's CEO and run-ins with the Competition & Markets Authority cannot be ignored, whilst Brexit and supply chain challenges have offered their own hurdles."
Having decided to divide the controversial joint role of executive chair and chief executive officer, the firm shared that the process to recruit a new non-executive chair was "progressing at pace", and "a number of high calibre candidates" for CEO are under consideration.
AJ Bell analyst Russ Mould commented: "Fortunately, whoever it hires will inherit a strong business with fingers in many pies.
"JD Sports is more than premium trainers. It is now more involved in the biking space, capitalising on interest from those having a mid-life crisis and happy to splash several thousand pounds on the latest carbon frame road bike, as well a general trend for people to be healthier and do more exercise."
By Eric Cunha; [email protected]
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