JD Sports reported record profits of close to £1 billion in its latest financial year, but warned that current economic problems will hamper its future growth.
The Greater Manchester-based retail giant has reported pre-tax earnings and exceptional items of £947.2 million for the 12 months to January 29, 2022, up from the £421.3 million it made during the previous year. Revenue from the listed group also jumped from 6.1 billion pounds to 8.5 billion pounds during the same period.
However, JD Sports – which markets itself as the king of coaches – said its earnings growth is expected to slow in the year to next January, due to pressures from the UK cost of living crisis and broader economic problems.
READ MORE: JD Sports recognizes ‘cartel activity’ with Elite Sports with Rangers replica sets to set prices
The results are the first since Peter Coogill abruptly resigned as CEO last month after 18 years in the role. In February, JD Sports was fined £4.3m by the Competition and Markets Authority (CMA) for sharing information with Footasylum, which had agreed to buy it at the time for £90m.
The deal was blocked by the watchdog a few months ago but not before Coogill met his corresponding number at Futasilom in a car park in Perry, according to a video seen by the Sunday Times.
JD said last month that Coogill would step down after a review of its internal management and controls, but the move came amid speculation that he would be fired. Board member Cath Smith, who has worked for Adidas and Reebok in the past, has taken the helm as the company searches for a new CEO.
The company’s problems persisted, with the CMA provisionally finding earlier this month that it had conspired with sporting goods company Elite Sports and Rangers Football Club, to fix prices for Rangers apparel items.
Interim Chairman Helen Ashton said: “This was another period of outstanding progress as the group delivered record pre-tax core earnings and extraordinary items of £947.2m (2021: £421.3m), more than double the previous record of £438.8m. In the period up to February 1, 2020, which was the last completed fiscal year before the Covid-19 pandemic.
“This result demonstrates our ability to grow in both existing and new markets, and the strength of our global offering and consumer engagement in-store and online.
“We, as always, are indebted to our talented and committed colleagues across our group and send our thanks for the incredible work they do every day. We are particularly encouraged by the strong performance from the group’s banners in North America.
“It is increasingly clear that the Group’s progress in North America, and the United States in particular, is having a positive long-term impact on both the Group’s overall performance and its relationships with international brands.
“Balancing the operational requirements of running and growing a business through a global pandemic with commitments to raising governance standards has been complex and not without challenge.
“A number of regulatory issues arose during this time, which, after a series of independent investigations along with the completion of the Group Governance Review, highlighted the need for greater relevant board expertise and further formalization of governance systems, risk management recording, documentation Evaluate internal controls and mechanisms for reporting related matters to regulatory authorities when required.
“The process of appointing a CEO is underway with a number of high caliber candidates in various stages of consideration, including some who have recently expressed interest in the well-known position. The process of appointing a new Non-Executive CEO is also advancing at a rapid pace.
“Meanwhile, the Board of Directors is pleased with how the interim arrangements are working and will update the market on the progress of these searches as appropriate. JD is a globally recognized multi-channel retailer with proven strategy, clear momentum, and a large talented and flexible management team recognized in the sports fashion industry. As one of the leading figures in their fields.
“Board members and senior management are united in their determination to build on historical successes with the same laser focus on consumer, commercial rigor, attention to service excellence, and intensity of analysis.
“We will continue to strive to inspire the emerging generation of ambitious-minded consumers by connecting with the global culture of sports, music and fashion with the highest standards of consumer experience and execution, both in-store and online.
“Building on our position as a leading global strategic partner, we will also continue to offer a mix of products and brands that is passionate, exclusive and ever-evolving.
“While we are encouraged by the resilient nature of consumer demand in the current year thus far, we remain aware of the headwinds that prevail at this time including the overall global macroeconomic situation and the geopolitical situation.
“It is against this background that the Board believes that the core earnings before tax and exceptional items for the year ending January 28, 2023 will be consistent with record performance for the year ending January 29, 2022.”
The group added that it had repaid 24.4 million pounds of support received by its companies in the United Kingdom during the year to January 29 of the leave scheme.