Tiso owner JD Sports flags supply concerns after record first-half numbers
The sportswear retailer revealed a bumper pre-tax profit of £364.6 million for the six months to July 31, compared with £41.5m for the same period last year.
The group now expects to deliver profits of £750m for the financial year, well ahead of the £600m previously predicted by analysts.
Peter Cowgill, founder and executive chairman of the retail group, which has 13 Tiso stores in its vast portfolio, hailed it as a "stellar" set of figures amid a raft of industry challenges.
The group also posted a jump in sales despite still being impacted by some pandemic restrictions, weakened high street footfall, supply chain challenges and Brexit-related costs.
Revenues jumped by 52 per cent to £3.89 billion as the firm benefited from "robust consumer demand" in the UK and Ireland.
JD Sports said it saw a "strong retention" of UK sales during the lockdown at the start of the quarter as customers continued to buy products from its digital platforms. It added that it was buoyed by "strong pent-up demand" after reopening sites again from April.
Cowgill said the group was tackling some supply disruption regarding items made in East Asia.
"In the Far East we have seen that supply is particularly being disrupted, with some countries like Vietnam seeing lockdowns," he said.
"It is clearly a challenge but we have a fantastic team who have been dealing with all supply issues.
"I think it was inevitable we would see some inflation so we have been prepared for that, and given our profits, are in a really strong position to deal with that."
Susannah Streeter, senior investment and markets analyst at financial services provider Hargreaves Lansdown, said: “JD Sports’ scoresheet has notched up plenty more wins as lockdowns have eased, with record earnings for the first half, cementing its position as a star on the retail sportswear scene, but supply chain issues could still trip up sales in the coming months.
“The sports leisure market in the US is huge and here JD Sports is stepping up the pace of sales, which will be key to future growth prospects.”
Richard Hunter, head of markets at Interactive Investor, noted: “Exceptional, if temporary, tailwinds from the US businesses has propelled JD to report record profits for the half-year.
“The US remains the powerhouse of growth for JD. Government support in the form of cheques to individuals and a relative lack of lockdown restrictions were driving factors, but the group’s increasing presence under various trade banners is also underpinning progress.”
AJ Bell investment director Russ Mould added: “What JD Sports has achieved in the retail sector in the last decade or more is remarkable, and that is reflected once again in record first half results.
“Partly the business has benefited from wider trends around athleisure, as the lines between what younger people wear to work out, go out and stay in become more blurred.”
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