JD Sports Fashion Plc managed to report generally good results for the year ended Jan. 30, 2021, in spite of the impact from the coronavirus pandemic and Brexit, “which have severely tested all aspects of the business,” the management said. The company’s profit before tax and exceptional items of £421.3 million (€486.0m-$578.0m) was only slightly down from the previous year’s level of £438.8 million. Even after accounting for exceptional charges, it showed a decline of only 7.0 percent. The gross margin improved by one percentage point to 48.0 percent across the group.
Revenues for the U.K.-based retail group, which runs sports and outdoor store banners like JD Sports, Size?, Blacks Leisure, Millets, Go Outdoors and the U.S.-based Finish Line, rose by 0.9 percent to £6,167.3 million pounds (€7.11bn-$8.46bn). The company attributed this relatively good performance to “significant” retention of sales and profitability through this period thanks to “the strength and premium position of the JD brand,” which is appreciated by the sports brands, the flexibility of the group’s infrastructure and an “agile” multi-channel ecosystem built up over a number of years. The retention rates were highest in Northern Europe, where the online retail channel is more mature.
In the Outdoor segment, sales went down by 13.2 percent to £359.3 million (€414.5m-$493.0m). The group said the reorganization of Go Outdoors in the first half of the year was a difficult process, but it has given the banner a positive platform from which to develop. It intends to invest in all aspects of the business and will now present product offers in key categories. This includes fishing, where it has now started to integrate the Fishing Republic business into larger Go Outdoors stores by creating specialist areas for fishing products. The Go Outdoors, Blacks, Millets and Ultimate Outdoors businesses now operate on common merchandising systems with shared commercial resources.
The Outdoor segment had a difficult first half of the year due to lockdowns but rebounded in the second half of the year. In the third quarter, a period that was largely free from trading restrictions, it saw sales growth across the combined physical and digital channels of more than 10 percent. Many of its stores had to be closed again at various times through the fourth quarter, with total sales retention through the closure periods of about 80 percent.
The management said that the positive consequences of the restructuring of the Outdoor businesses are reflected in the fact that, even with the stores closed for a number of months, the Outdoor segment reduced its losses before exceptional items for the full year to £6.1 million (€7.0m-$8.4m), compared with £23.5 million for the previous year. The gross margin increased by 0.3 percentage points to 42.2 percent. After exceptional items, the pre-tax loss was reduced to £26.5 million (€30.6m-$36.4m), compared with £73.2 million for the previous year.
More on the group’s results in SGI Europe.