Retailer JD Sports Fashion has said profits are set to rebound more strongly than expected over the year ahead as stores reopen after lockdown.
Britain’s biggest sportswear retailer upped its outlook for the year to January 2022, forecasting that profits will surge above pre-pandemic levels as restrictions ease – to between £475 million and £500 million.
The firm had previously predicted profits of between £440 million and £450 million for the current financial year.
It comes after the group proved resilient during the pandemic thanks to a successful shift to online trading and a raft of acquisitions in the UK and abroad.
JD Sports reported underlying pre-tax profits falling to £421.3 million for the year to January 30 from £438.8 million the previous year.
But this beat the group’s recently upgraded forecast for at least £400 million and was far higher than the initial £295 million pencilled in.
On a statutory basis, pre-tax profits fell 7% to £324 million, though revenues edged higher to £6.17 billion from £6.11 billion.
Shares in the group lifted 2% as it restarted shareholder dividend payments with a final payout of 1.44p a share.
But it has not yet offered to repay any Covid-19 Government support, including furlough cash.
JD Sports said: “Without this support, it is likely we would have had to make tens of thousands of our colleagues, particularly those who work in stores, redundant.”
The firm said it was able to retain around 70% of its UK revenues across its JD and Size? brands by shifting online during the first lockdown last spring, which rose to 100% through the November lockdown.
It also hailed an “exceptional trading performance” in America as economy-boosting measures helped spur on US consumer demand, with profits in the division jumping to £156.6 million from £94.2 million the year before.
JD Sports has been expanding rapidly in the US through acquisition, recently snapping up Shoe Palace following a deal to buy the Finish Line shoe-store chain in 2018.
Its expansion strategy also saw the group agree a £90 million deal to buy UK rival Footaslyum early in 2019.
The move was blocked by the UK competition watchdog but was granted a reprieve at the end of last year after the Competition Appeals Tribunal reversed the Competition and Markets Authority (CMA) decision.
The CMA is now reassessing the merger, which JD Sports said could take “several” months.
JD Sports also booked a £55.6 million hit on the Footasylum brand as it warned store shopper numbers at the chain may not recover to pre-pandemic levels, given that it attracts older customers.
Peter Cowgill, executive chairman of JD Sports, said: “The global Covid-19 pandemic and, more recently, the UK’s formal exit from the European Union have presented a series of unprecedented challenges which have severely tested all aspects of our business including our multichannel capabilities, the robustness of our operational infrastructure and the resilience of our colleagues.
“Whilst we must recognise the substantial level of temporary store closures to date and ongoing, we remain confident that we are well placed to benefit from the opportunities that prevail,” he added.
