JD Sports cautious despite leap in profits

Retailer JD Sports revealed a 28 per cent leap in pre-tax profits yesterday but warned that margins were being squeezed by a rise in its costs and January's VAT hike.

The group, which has 350 outlets in the UK, said pre-tax profits increased to 78.6 million in the year to 29 January, up from 61.4m the year before. Sales were up 15 per cent to 883.7m.

But the retailer said net sales had declined by 1.2 per cent in the first eight weeks of its new financial year and warned that the UK government's austerity measures had significantly affected the retail environment.

Shares fell 7.1 per cent to close at 837.5p, despite a rise in the dividend. It proposed a final divi of 19.2p, taking the total for the year to 23p per share, up 28 per cent on the year before.

JD has expanded its appeal and differentiation from competitors in the past year after it acquired brands including Sonneti, Chilli Pepper and Nanny State, and rugby brands Kooga and Canterbury.

Meanwhile, fashion website Asos bucked the retail gloom, saying profits were likely to be at the top end of market forecasts and reporting spectacular growth figures from its international arm.

The group - targeted at 16 to 34-year-olds with clothes and accessories styled on those worn by celebrities - posted a 24 per cent rise in UK sales during its fourth quarter to 31 March.

The firm, which was founded in 2000, saw its shares jump 14 per cent yesterday to close at 1,950p.

Asos, which stands for "As Seen On Screen", launched a dedicated website in America at the end of September, with sites following soon after in France and Germany. It plans to launch further sites globally this year.

Spanish fashion giant Mango, which has five stores in Scotland, also hailed the growth of its online division as the retailer posted an 11 per cent rise in sales for 2010 to €1.3 billion (1.2bn).