JD Sports says UK stores 'likely' to remain closed until at least Easter
The sportswear retailer also said closures of its stores in other countries are “possible at any time” as it warned that Covid-19 continues to create an uncertain outlook.
However, it said its profits for the current financial year will be “significantly ahead” of forecasts amid strong customer demand.
The company told shareholders that it expects to post a headline pre-tax profit of at least £400 million for the year to January 30, surpassing previous expectations of around £295m.
It said it was buoyed by “robust” demand in the second half of the year, including during the key months of November and December.
Total revenues, on a like-for-like basis, rose by more than 5 per cent in the 22 weeks to January 2 compared with the same period last year.
The retailer said customers “readily switched” between its stores and online business in the run-up to Christmas.
JD Sports warned that the pandemic means there is still considerable uncertainty but said it expects profits in the next financial year to be between 5 per cent and 10 per cent higher than the current year.
In a statement to the stock market, it noted: “Looking ahead, it is clear that operational restrictions from the Covid-19 pandemic will also be a material factor through at least the first quarter of the year to January 22 2022.
“Whilst we are confident that we have the proposition to continue to attract consumers throughout this period, the process to scale down activity in stores and scale up the digital channels, often at extremely short notice, presents significant challenges.
“We are indebted to all of our colleagues in our different territories who have had to adopt new ways of working.”
AJ Bell investment director Russ Mould said: “This morning’s update from JD Sports does not read like there is a global pandemic going on.
“It grew like-for-like sales materially in the period encompassing Christmas. To guide for profit ahead of expectations despite the massive disruption resulting from Covid is a mammoth achievement.
“It also demonstrates the fact that retail spending itself has held up reasonably well despite the crisis – it’s just that sales have shifted from physical stores to the internet.”
He added: “A short-term concern will be that its youthful customer base will be particular exposed to the mounting jobs crisis in the UK, given they are probably more likely to work in hospitality or other retail businesses.
“Longer term, while JD is still seen in a positive light by major sporting brands like Nike and Adidas, the former, in particular, is shifting to a more direct-to-consumer model, selling more product through its own website. For now though, JD is still a valued retail partner.
“Given this encouraging update, investors will be even more relieved management did not take on the distraction of buying failing department store Debenhams before Christmas. The recent bolt-on acquisition of Shoe Palace in the US looks a much better fit.”
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