JD Sports reported earnings tumbled in the first half, hurt by £10 million ($16.2mm) in losses from Blacks, which it took out of administration in January.
First-half pre-tax profits came in at just £2.9 million ($4.7mm) from
£20.1 million in the first half of last year. Revenues rose 26 percent
to £556 million ($898.2mm). Like-for-like sales in its core retail
business ticked up 1.1 percent in the first half.
blamed Blacks' loss on "critical lack of stock and unsustainable cost
base following acquisition from administration with vast majority of the
loss incurred in the first three months." The company described Blacks'
business as "stabilising with stores fully restocked and central cost
reorganisation programme ongoing."
It added that the further
reduction in operating profit was largely due to the phasing of earnings
streams from new acquisitions and acquisitions made in the prior year
together with duplicate and excess warehouse operating costs incurred in
the transition to the centralised Kingsway warehouse which is now fully
Recent trading has been mixed with like-for-like
sales in the sports shops up 3.2 percent in the six weeks to September,
while like-for-like sales at JD's fashion stores dropped 6 percent.
Cowgill, Executive Chairman, said, "I stated in April that the recent
expansion activity in the Group, the relocation of distribution
facilities and the resolution of the stock and property issues in the
Blacks business would impact results in the short term. As expected,
this has proven to be the case but it does provide the Group with a very
positive platform for future development.
"I am pleased to
report that our primary JD fascia remains robust and we have increased
our overseas presence with the intention of producing long term value
for shareholders. The robust trading in the Sports Fascias has continued
since the period end although trading in the Fashion Fascias has been
more difficult. Our Outdoor business continues to stabilise and aims to
break even in the second half before any restructuring charges.
ever, the Group result for the full year remains very dependent on the
sales and margin performance in December and January. Notwithstanding
the economic pressure on margin and the general increase in taxation and
other levies across Europe, the Board believes that the Group is well
positioned to deliver results that are within the range of current
The company said full-year profit before tax should come within expectations of £65-£70 million.