JD Sports posts record profits but warns economic woes will hold back growth

Scandal-hit retailer JD Sports Fashion has unveiled a record £947.2 million annual profit haul, but warned that earnings will remain flat in the current financial year amid the cost-of-living crisis.

The group, whose long-term boss, Peter Cowgill, recently resigned in the wake of a storm of negative publicity and a fine from the UK competition watchdog, saw underlying pre-tax profits more than double from £421.3 million the previous year.

Statutory pre-tax profits jumped to £654.7 million in the year to January 29 from £324 million the previous year as demand for sportswear showed no sign of slowing.

But JD Sports – which markets itself as the King of Trainers – said profit growth is expected to be held back in the year to next January, due to pressures of the cost-of-living crisis in the UK and wider economic woes.

Helen Ashton, interim chairwoman of JD Sports, said: “Whilst we are encouraged by the resilient nature of the consumer demand in the current year to date, we remain conscious of the headwinds that prevail at this time, including the general global macro-economic and geopolitical situation.

“Against this backdrop, the board believes that the headline profit before tax and exceptional items for the year end January 28 2023 will be in line with the record performance for the year ended January 29 2022.”

She said the search for a new chief executive is continuing, with a “number of high-calibre candidates at different stages of consideration”.

The company’s hunt for a new non-executive chairman is also “progressing at pace”, she added.

Mr Cowgill resigned as executive chairman in late May after 18 years in the role.

In February, JD Sports was fined £4.3 million by the Competition and Markets Authority (CMA) for exchanging information with Footasylum, which it had agreed to buy at the time for £90 million.

The deal had been blocked by the watchdog a few months earlier but not before Mr Cowgill had met his opposite number at Footasylum in a Bury car park, according to video seen by the Sunday Times.

JD said last month that Mr Cowgill was stepping down after a review of its internal governance and controls, but the move came amid speculation that he was ousted.

Board member Kath Smith, who has worked for Adidas and Reebok in the past, has taken the helm while the company looks for a new chief executive.

The firm’s woes have continued, with the CMA finding provisionally earlier this month that it conspired, together with sporting goods firm Elite Sports and Rangers Football Club, to fix prices of Rangers club clothing merchandise.

The firm’s results showed that group revenues surged to £8.6 billion from £6.2 billion the previous year.

It said sales for like-for-like businesses in the current year so far are 5% ahead of a year earlier, despite shortages of key footwear due to supply chain disruption.

The group added that it has repaid the £24.4 million support which its UK businesses received during the year to January 29 from the furlough scheme.