JD Sports: National living wage could cost jobs

JD Sports Fashion plc (JD.L), the leading retailer of sports, fashion and outdoor brands, reported profit before tax from continuing operations of 44.71 million pounds for the 26 weeks ended August 1, 2015, compared to 23.75 million pounds in the prior-year period.

Underlying sales at its core sports fashion business rose by over 10 percent in the period, led by demand for branded trainers from the likes of Nike, the firm said, adding that trading since had also been encouraging.

Revenue increased 21% to £809,901 from £670,254 in 2014, although the firm warned organic growth rates of the last two years were unlikely to continue indefinitely.

The new National Living Wage could affect jobs even if it means consumers have more to spend, JD Sports executive chairman Peter Cowgill has said.

The sports fashion group’s margins outside the United Kingdom were slightly lower than previous years due to the weak euro, dragged down by the ECB’s unprecedented bond-buying.

The firm said it had also made progress at its smaller and loss-making outdoor business Blacks in the half and that it was confident on prospects for its sports roll out across Europe. “We are maintaining a long term view on our European development project and will continue to address the issue both internally and externally with our global brand partners”, added Cowgill.

He said his company could absorb higher wages and it would not effect immediate recruitment plans.

However, he assured investors that the business will continue to invest in the “multi-channel retail proposition and driving improved buying, merchandising and retailing disciplines”, all of which have contributed to JD’s current record breaking success.

“Given the demanding comparatives following two years of strong revenue growth, we are encouraged by the positive nature of the trading to date in the second half across our core fascias”.