17th Jun 2014 07:59
LONDON (Alliance News) - JD Sports Fashion PLC Tuesday said it has seen a pleasing start to the new year, as its core sportswear business saw trading in the first 18 weeks of its new financial year boosted by the build up to the football World Cup.
In a short statement Tuesday, the sportswear, outdoor clothing and fashion retailer did not give sales numbers, as it usually does in its interim management statement, saying that, as the World Cup build up has enhanced its Sports division?s performance, it would be "potentially misleading" at this stage to report precise like-for-like figures. However, it said it is "certainly pleased" with the underlying performance of the division to date.
"Based on the trading performance to date we anticipate a satisfactory increase in first half profitability in line with our expectations," the company said in a statement covering the 18-week period ended June 7.
Analysts at Investec were forecasting a flattish full-year profit for JD Sports, but said that may prove conservative given Tuesday's trading statement, saying a good England performance could result in even further upside.
"While early in the year, we are encouraged by management?s cautious optimism, particular in its core Sports fascia. A ?successful? World Cup, typically driven by the longevity of England?s performance, would be the icing on the cake," said Investec Analyst Kate Calvert in a research note after JD Sports Fashion released its trading statement Tuesday.
Profit and sales growth in the company in recent years has been driven by its core sportswear business, including JD and its footwear stores Size?, while its fashion and outdoor businesses have been a drag. The company also has been expanding overseas, having recently acquired a package of stores in the Netherlands and Germany, while adding to its international offering in France and Spain.
The company's fashion business, which includes brands Bank and Scott, remains the company's biggest problem, as it increases its trading losses.
In April, Executive Chairman Peter Cowgill said the fashion business continues to be hit by the consumer shift in the youth fashion sector to online fast fashion retailers, such as ASOS PLC, as well as a competitive UK retail sector.
The restructuring and turnaround of its outdoor division, which includes brands Blacks and Millets, continues to progress, with the company saying in April it finally reached breakeven for its outdoor business in the second half of its last financial year, following a two-year struggle with the brands. JD Sports Fashion acquired the loss-making chains for GBP20 million, after rescuing them from administration in January 2012.
JD Sports Fashion Tuesday said that its outdoor business is maintaining the positive progress made against weak prior year comparatives, whilst its fashion business is showing some signs of improvement.
"Whilst Fashion continues to experience a varied performance, there are encouraging signs for the future," the company said.
Chief Executive Barry Brown stepped down at the end of May after 30 years at the company, of which 14 years were spent as CEO.
At the time of the announcement, the company said it was not going to appoint an immediate replacement for Brown.
It did not provide any update on Brown's replacement Tuesday.
JD Sports Fashion said it plans to release its half-year results on September 17.
JD Sports Fashion shares were up 3.3% in early trading Tuesday, at 1,679.79 pence per share.
By Rowena Harris-Doughty; [email protected]; @rharrisdoughty
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