JD Sports heads for £1bn profits as it says trainers are ‘affordable luxury’
JD Sports has said it is on track to hit £1bn of profits this year as it steps up expansion in the US and Europe in a bet that the trend for trainers and sports leisurewear will roll on.
Régis Schultz, the retail group’s chief executive who took over last summer, said JD’s young shoppers had more opportunity to get work, amid staff shortages in all its key markets, and “whenever they get a job they can buy the gear they love”.
“[Young people] are going out more than in the past and when they go out they want to show off,” he said, adding that new trainers were an “affordable luxury treat”.
He added that once people had made the shift to wearing sports shoes they did not want to move back to less comfortable footwear and so he expected to the trend to continue.
Schultz’s comments come as JD reported an 18% rise in sales to £10.1bn, while underlying profits rose 4.6% to £991.4m, in the year to the end of January.
He said half the 12% sales rise at the group’s sports chains in the UK was the result of inflation and half because of additional sales. The retailer expects inflation to ease in the second half of the year as transport and energy costs are declining.
Pre-tax profits for the group, however, slumped by almost a third to £440.9m as JD wrote down the value of acquired brands including Wheelbase, Wellgosh, GymKing and Bodytone. It took a hit from the sale of the Footasylum chain and a group of brands sold to Mike Ashley’s Frasers Group including fashion brands including Liam Gallagher’s Pretty Green and the 1980s brand Tessuti. A withdrawal from South Korea also hit profits.
Schultz said JD expected to top £1bn of profits this financial year as it stepped up expansion in the US to add up to 600 stores over the next five
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