JD Sports profit boosted by athleisure trend
JD Sports profit soared 80 per cent for the year to January, boosted by its athleisure wear and international expansion.
The retailer posted a profit before tax of £238.4 million, a £131.6 million increase from the same period the previous year.
Like-for-like sales grew 10 per cent over the year.
Peter Cowgill, executive chairman, said the revival of the sportswear was a cultural shift that was driven by “Instragram, selfies and a rising gym culture.”
Cowgill said now, there are more low-cost budget gyms than every before and people have become more casual.
“You see them wearing trainers in urban bars and restaurants,” he said.
Fiona Paton, associate retail analyst at GlobalData, said although the JD Sports fascia remains the star player, its outdoor division also saw signs of improvement delivering a profit for the first time; and the acquisition of Go Outdoors in November 2016 should facilitate future growth in this area.
The retailer has entered Portugal and the Netherlands through acquisitions of European sportswear retailers in FY2016/17, contributing to a net opening of 54 European stores. JD Sports has also opened two new stores in Malaysia and is launching in Australia later this month.
“The brand is well represented in the UK with 369 UK stores and a robust online proposition, so international expansion is a wise move,” Paton said.
According to Paton, investment in the instore experience has helped JD Sports drive double digit l-f-l growth of sports fashion in FY2016/17. “Investments include: digital technology instore, multichannel retailing, and exclusive product launches with leading sportswear brands such as McKenzie. This provides a superior instore experience – especially against key rival Sports Direct – and encourages repeat visits among customers.”
Paton said JD Sports’ success is not purely a result of its actions; the retailer has reaped the rewards of the popularity of athleisure, as well as the success of Great Britain in the 2016 Olympics, which helped put sport at the forefront of consumers’ minds.
“The athleisure trend is likely to continue momentum but JD Sports will find it harder to drive l-f-l growth in a competitive market, the retailer should consider supporting its current sports proposition with a more extensive and specialised equipment offer,” said Paton.