JD Sports Fashion missed annual profits expectations, despite more people buying sports and casualwear during the pandemic lockdown, as it reinstated dividend payments and forecast higher earnings for the current year.
The company on Tuesday said pre-tax profits fell to £324m from £348m, compared with a January estimate of £400m, on revenues of £6.17bn, up from £6.11bn a year earlier. The total dividend was lifted to 1.44p a share from 0.28p.
Current fiscal year profits were estimated to be in a range of £475m – £500m.
JD Sports said clothing sales, principally casualwear and sportswear, performed strongly in the year with sales of apparel ranges representing more than 50% of UK revenues.
“Whilst we must obviously acknowledge the increased levels of working and exercising at home, it is our belief that the growth in casualwear and sportswear is not a temporary phenomenon with the culture of casual attire in working and social environments gathering momentum over a number of years,” said chairman Peter Cowgill.
JD Sports said it was incurring “some duties and disruption” from customs checks on the transfer of goods from the UK into EU countries after Britain’s exit from the European Union on January 1 and was fitting out a new warehouse in Dublin, Ireland to avoid delays, while also looking for another larger permanent facility in Europe to process the majority of orders destined for the Continent.
The new capacity will be in addition to an 80,000 square foot warehouse opened in Belgium last year to mitigate the impact of Brexit. Cowgill said the company added that it had signed a deal with Clipper Logistics to provide warehousing and e-fulfilment to meet continuing high demand from online sales.
