JD Sports forecast profit growth this year and plans to ramps up warehouse space post-Brexit

(qlmbusinessnews.com via uk.reuters.com — Tue, 13th Apr 2021) London, UK —

(Reuters) -Britain’s biggest sportswear retailer JD Sports on Tuesday forecast profit growth this year and announced plans to ramp up warehouse capacity to fulfil online orders and minimise disruptions from Brexit.

The company, known for its sneakers and athleisure products, also said it would resume dividend payments after beating analysts expectations for profit for the year ended Jan. 30, 2021.

“The global COVID-19 pandemic and, more recently, the UK’s formal exit from the European Union have presented a series of unprecedented challenges which have severely tested all aspects of our business,” said Executive Chairman Peter Cowgill.

JD Sports’ online business performed well during the pandemic and the company has embarked on at least three big acquisitions in the United States and Europe in the past few months. More deals are expected to follow after the company raised 464 million pounds ($638.46 million) in equity in February.

Britain’s departure from the European Union, however, had caused some disruptions due to customs checks on the transfer of goods from the UK to EU countries, the sportswear retailer said. It will open a warehouse in Dublin that will be operational in the second half of this year in order to fulfil online orders in Ireland.

JD Sports signed a letter of intent with Clipper Logistics for e-fulfilment and warehousing in the UK as it expects online sales to remain elevated and social distancing norms to remain in the foreseeable future.

The company, which opened a facility in Belgium last autumn, said it continued to review opportunities for a larger permanent European facility to meet demand from mainland Europe.

JD expects adjusted pretax profit for the year through January 2022 of between 475 million pounds to 500 million pounds. It reported annual profit of 421.3 million pounds and proposed a dividend of 1.44 pence per share.

JPMorgan said in a note that the confidence shown by JD at such an early stage of the year “should be seen as a strong signal of robust trading and execution”.

($1 = 0.7267 pounds)

Reporting by Vishwadha Chander and Yadarisa Shabong