Strong demand during lockdown helped JD Sports (LSE: JD) achieve record first-half results. Pre-tax profit, excluding exceptional items, climbed to £439.5m. That compares to just £61.9m in the first half of 2020.
Adjusted earnings per share soared to 29.16p, up from 6.09p a year ago. But despite these bumper profits, the company is remaining cautious. JD Sports is keeping the dividend on hold for now.
Tuesday’s announcement did, though, speak of “a potentially larger full-year dividend.” The reason for the caution to allow for “the consequences of any potential further restrictions on trading“.
The demand for sports leisure clothing echoes the experience of Associated British Foods, which is also seeing strong sales of comfort clothing at Primark.
But what of the full-year outlook for JD? Executive chairman Peter Cowgill said the company is “generally encouraged by our performance in the first few weeks of the second half“. But he did add that “retail footfall remains comparatively weak in many countries“.
Big full-year JD Sports profits?
From an apparent position of caution, Mr Cowgill went on to say that “we presently anticipate delivering a headline profit before tax for the full year of at least £750m“.
In the same update, JD Sports spoke of disappointment over the latest from the Competition and Markets Authority (CMA) on the proposed acquisition of Footasylum. The CMA, it seems, is provisionally set to once more prohibit the move.
JD’s displeasure stems from what it says are substantial changes in the market. Meanwhile the CMA’s stance appears to remain unmoved.