- Profits more than doubled versus pre-pandemic levels

- JD Sports has interviewed ‘high calibre’ CEO candidates

- But retailer sees no profit growth this year

Shares in JD Sports Fashion (JD.) jumped 4.2% to 111.25p after the sportswear retailer reported record results with adjusted pre-tax profits more than doubled versus pre-pandemic levels.

However, the shares had been weak in early dealings after the premium trainers purveyor conceded it expects no profit growth at all in the current year with consumers feeling the squeeze.

On a more positive note, the tracksuits-to-replica shirts seller informed investors it has interviewed ‘a number of high calibre candidates’ for the role of CEO, with JD Sports in need of fresh leadership following the recent shock departure of executive chairman and long-standing boss Peter Cowgill.


For the year to January 2022, JD Sports delivered record headline profit before tax and exceptional items of £947.2 million, more than double last year’s £421.3 million haul.

It was also more than double the record £438.8 million profit generated in full year 2020, the last financial year before the Covid pandemic struck.

Revenue rose 39% year-on-year to the best part of £8.6 billion, demonstrating continued momentum in the business, though the financial year ended before the Ukraine crisis unfolded and inflation surged higher.

As AJ Bell investment director Russ Mould explained, this period is ‘not representative of the current environment in which consumers are under considerable financial pressure and are losing confidence with regards to the economic outlook, which will curb their ability and willingness to keep spending at levels seen in 2021.’


‘This result demonstrates our capacity for growth in both existing and new markets, and the strength of our global proposition and consumer engagement in store and online,’ insisted JD Sports’ interim chair Helen Ashton.

She said the board is ‘particularly encouraged’ by the strong performance from the deal-hungry retailer’s stores across the pond.

‘It is increasingly evident that the group’s progress in North America, and the United States in particular, is having a long-term positive impact both on the group’s overall performance and its relationships with the international brands.’


Ashton added: ‘The process to recruit a CEO is ongoing with a number of high calibre candidates at different stages of consideration including some who have only recently made their interest in the role known.’

A process to recruit a new non-executive chair is also ‘progressing at pace’.

Despite the cost of living crisis and concerns that demand for athleisure may dwindle as consumers return to work, JD Sports is ‘encouraged by the resilient nature of the consumer demand in the current year to date’, with revenue up 5% year-on-year on a like-for-like basis in the face of a global shortfall in the supply of popular footwear lines.

Given stiffening headwinds, JD Sports sees profits for the current year to January 2023 coming in flat year-on-year, though as Shore Capital points out, this result would still represent a ‘staggering’ 30% two-year compound annual growth rate.


AJ Bell’s Mould commented: ‘JD now expects no profit growth at all in the current year. To make matters worse, the company is still searching for a new leader after splitting with executive chairman and architect of the group’s success, Peter Cowgill.

‘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.

‘It has also expanded its presence in the gym market where there is a large cross-over with its customer base for clothing, outdoor equipment and bikes.’

Shore Capital said: ‘Notwithstanding the current geopolitical uncertainty, we are bullish on JD’s ability to pass through cost inflation to consumers and drive sales density thanks to a genuinely outstanding store portfolio and consumer engagement.

‘We continue to highlight the depth of JD’ multibrand and multichannel proposition as continued growth engines for the company, together with international prospects.’

DISCLAIMER: Financial services company AJ Bell referenced in this article owns Shares magazine. The author of this article (James Crux) and the editor (Steven Frazer) own shares in AJ Bell.


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Issue Date: 22 Jun 2022