Sportswear retailer JD Sports on Tuesday forecast profit growth this year and announced plans to open a new Dublin warehouse later this year 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 January 30th, 2021.
Britain's departure from the European Union had caused some disruptions due to customs checks on the transfer of goods from the UK to EU countries, the sportswear retailer said.
" We have been able to reduce our exposure to the adverse consequences of Brexit by opening an 80,000 sqft warehouse in Belgium in Autumn 2020 which is fulfilling a large proportion of our core ranges and fastest moving lines required for stores in Mainland Europe. This site is functioning very well but it does not provide a solution for either online orders or product destined for the Republic of Ireland, " JD Sports said in a statement. "In this regard, we are currently fitting out a 65,000 sqft warehouse near Dublin which will become operational in the second half of this year."
The group said it would continue to review opportunities for a larger permanent facility in Europe to look after the volume required for stores and online orders in mainland Europe. However, that facility is unlikely to be ready before autumn 2022.
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 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 in equity in February.
"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 expects adjusted pretax profit for the year through January 2022 of between £475 million to £500 million. It reported annual profit of £421.3 million 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”. – Reuters
