Get all your news in one place.
100’s of premium titles.
One app.
Start reading
Birmingham Post
Birmingham Post
Business
Jon Robinson & Henry Saker-Clark

Profits expected to dip at JD Sports as investors seek reasons to be optimistic

Retail giant JD Sports is expected to report a slight drop in profits when it published its latest set of results on Thursday, September 21.

The Greater Manchester-headquartered group has been predicted by analysts to report pre-tax profits of £380m for the six-month period, compared to £440m for the same time to July 2021.

Investors are prepared for a cooling in profits, as consumers come under pressure for soaring household bills, and inflation continues to grip retailers.

READ MORE: Click here to sign up to the BusinessLive North West newsletter

But they will still be keen for JD Sports' new leadership to outline its plans to boost profitability in the medium term, the PA news agency said.

Shares in the sportswear giant have slipped by 40% over the past 12 months after the challenging period, which included pressure from regulators and the departure of its long-standing boss.

Last month, the firm confirmed the appointment of former B&Q executive Regis Schultz as its new chief, forming a new top executive team alongside chairman Andrew Higginson.

It came after long-time executive chairman Peter Cowgill resigned in May after the company was hit with a £4.3m fine for sharing commercially sensitive information with Footasylum, the rival it was seeking to buy in a £90m deal.

Mr Cowgill had met his opposite executive at Footasylum in a Bury car park to exchange information, according to a video seen by the Sunday Times.

The Competition and Markets Authority (CMA) argued there was a "black hole" surrounding the meeting as neither could remember "crucial details" about the exchange and reported no notes, agendas or emails afterwards.

JD was also forced to sell Footasylum at a more-than £50m loss after the competition watchdog blocked the move over concerns it could lead to a worse deal for shoppers.

Peel Hunt analyst Jonathan Pritchard has said he believes the company might have turned a corner.

Mr Pritchard said the appointment of Mr Schultz "adds many strings to JD's bow" including experience in Asian markets and increased "digital know-how", while it will also benefit from an end to boardroom uncertainty.

The analyst was positive as he said the group was likely to "show robust recent trading and good profit delivery" in the update, as profits from the same period last year were buoyed by pandemic-driven financial support packages.

Like-for-like sales improved by 5% in the first five months of the financial year, the group announced in its previous update, but shareholders will also be keen to see that consumer demand has not softened further over inflation concerns.

AJ Bell's Danni Hewson said investors will "continue to fret about the cost-of-living crisis, how it may affect sales of trainers and athleisure wear and therefore impact JD Sports' business, although there is little sign of JD taking a hit, at least so far".

READ NEXT:

Sign up to read this article
Read news from 100’s of titles, curated specifically for you.
Already a member? Sign in here
Related Stories
Top stories on inkl right now
Our Picks
Fourteen days free
Download the app
One app. One membership.
100+ trusted global sources.