JD Sports Fashion boasts surge in sales and profits

The retailer, which targets the nation's 12-25 year-olds for its trainers, hoodies and caps at its JD, Size, Bank and Scotts stores, saw headline profits before tax jump by 26% to £67.4 million in the year to the end of January, on the back of sales up 15% to £770 million.

Like-for-like sales rose 2.5% and JD has jacked up its final dividend payout by 65% to 14.7p.
It comes despite youth unemployment hitting a record high during the period.

Barry Bown, chief executive, said: "Many of our customers still live at home with their parents, so they don't have mortgages to pay.

"Others are in their first jobs. They all still want clothes to wear on a Friday night and at the weekend."

Unlike arch-rival JJB Sports, which come close to collapse a year ago, JD has sailed through the recession.

Its shift away from sportswear to what it terms "sport and athletic-inspired fashion apparel" — clothes that are not actually worn for exercise — is credited with its success.

"If anyone comes into our shops looking for functional sports products, they will be disappointed," Bown admitted. "But we offer plenty of fashionable labels."

Executive chairman Peter Cowgill has described their competitors' strategy as "flogging clobber".

In contrast, particularly with rival Sports Direct's "pile 'em high, sell them cheap" approach, JD has smartened its shops and introduced more expensive labels.

However, like-for-like sales growth has slowed since the start of year, with comparable takings in the 10 weeks to April 10 up only 2%.

The company admitted the performance of its Scotts stores had been "relatively disappointing" and said it had made changes to its management team.

Bown added that he remained cautious about trading during the rest of the year.

JD's store in Westfield's shopping centre in White City has been one of its star performers and the company is searching for larger premises there.

It also plans to develop the JD Sports brand in France this year and is eyeing stores in Italy, Germany, Spain and Russia.

Seymour Pierce analyst Freddie George today raised his profit forecasts for the group for the next financial year to £75 million, and has a "buy" rating on the shares.

Mark Photiades, analyst at Singer Capital Markets, said: "Overall, these figures are excellent and should ripple through to more [profits] upgrades."