JD Sports warns weak euro will dent its margins
Sports fashion group JD Sports yesterday said it has made a “strong start” in the first 19 weeks of the year despite tough comparatives with last year, having announced record annual pre-tax profits of £100m in April.
In a trading update ahead of its annual general meeting yesterday, the Size? and Millets owner said the company was pleased with the growing level of sales in Europe.
However, it cautioned that the weak euro, dragged down by the ECB’s quantitative easing measures, will dent margins at JD stores outside the UK.
Executive chairman, Peter Cowgill, said: “Whilst we are now trading against challenging comparatives for the remainder of the year, the board remains confident that current earnings expectations for the year ended 31 January 2016 should be met.”
Analysts have forecast profits of around £108m.
JD Sports has over 840 stores including 70 in Europe, operating under brands including Chausport in France and Sprinter in Spain. In November it sold its struggling fashion arm Bank in order to focus on its sports brands.
In 2012, JD Sports bought outdoor retailers Blacks and Millets out of administration and has invested in turning both brands around after hiring new management teams and improving stock.
Losses across both businesses narrowed by £3.1m to £4.9m and analysts at Investec yesterday estimated that losses will narrow further this year to £800,000.