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(Sharecast News) - JD Sports Fashion said it expected annual profit to pass £1bn after a record result in the year to January 28 as buyers snapped up trainers in the shift towards leisurewear.
The seller of trainers and sportswear posted profit before tax and exceptional items of £991.4m, up from £947m a year earlier and beating guidance. It also flagged price hikes this year of between 2% to 3% after increases of up to 10% last year
It now expects profit before tax and adjusted items for the 53 week period to February 3 2024 to be in line with the current average consensus expectations of £1.03bn.
On a pre-tax basis, profits fell to £440m from £654m, after including a £550m as the company consolidated previous acquisitions and sold off smaller sports brands. Shares in the firm fell up to 6% in London trade.
Revenue rose to £10.1bn, up from £8.6bn. JD also reported organic sales growth of more than 15% in the first 13 weeks of the year.
Despite the results, shares in the company fell in London trade, and AJ Bell investment director Russ Mould JD said JD Sports "still has work to do and considerable sums to spend to meet its ambitious goals for growth".
In February new chief executive Régis Schultz outlined plan to spend up to £3bn to roll out as many as 1,750 stores globally over five years.
"For now, Schultz is off to a flier in his new role, replacing the long-term brains behind the business, Peter Cowgill. JD is demonstrating the strength of its brand and its successful capture of the under-25 demographic as it enjoys resilient sales," Mould said.
"However, it needs to be wary of any shifts in consumer preferences. Fashion is by its nature cyclical and a move away from the athleisure trend would be unhelpful to JD."
"The company must hope that its target market, potentially insulated from cost-of-living pressures if they still live at home, continues to enjoy a decent level of disposable income and that its relationships with core brands like Adidas and Nike remain strong as they pursue direct-to-consumer strategies."
Reporting by Frank Prenesti for Sharecast.com
