8th Sep 2020 08:30
(Alliance News) - JD Sports Fashion PLC on Tuesday said it was "reassured" by its performance in the first half despite a sharp drop in earnings.
JD Sports shares were trading 8.2% higher in London on Tuesday at 783.80 pence each.
Revenue for the half-year ended August 1 came in at GBP2.54 billion, down 6.6% from GBP2.72 billion a year ago.
Sports Fashion revenue shrunk by 4.6% to GBP2.40 billion, while Outdoor revenue tumbled more dramatically, by 30% to GBP142.5 million.
Total gross margin in the half-year across the company was 45.6%, down 1.3 percentage points compared to 46.9% a year prior. This primarily reflected promotional activity in stores in the UK and Europe after re-opening from lockdown to clear non-seasonally relevant products, the retailer said.
Pretax profit dropped by nearly two thirds to GBP41.5 million from GBP129.9 million. JD Sports said the reduction in profitability was due to additional costs associated with the shift in revenue to online channels, particularly during the period of temporary store closures.
The company declared no dividend for the first half compared to 0.28 pence a share paid a year earlier.
The FTSE 100-listed retailer added that it is "generally encouraged" with its performance post-lockdown, though noted that retail footfall remains comparatively weak.
JD Sports also reinstated guidance for the full-year.
"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 GBP265 million when calculated under IFRS 16 'Leases'," the retailer said.
The sports fashion company reported headline pretax profit of GBP438.8 million for the year to February 1.
By Evelina Grecenko; [email protected]
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