JD Sports Fashion PLC has bested annual earnings expectations, posting record sales on Tuesday that were largely aided by its acquisition of athletic retailer Finish Line Inc.
The European sports giant saw revenues jump by 47.5 percent to 4.72 billion pounds, or $6.16 billion, in a year accented by its $558 million takeover of the United States-based specialty retailer. Last March, JD Sports announced that it would buy 100 percent of the issued and outstanding Finish Line shares at a price of $13.50 apiece in cash.
“We believe that our acquisition of the Finish Line business in the United States — the largest market for sport lifestyle footwear and apparel and the home to many of the global sportswear brands — will have positive consequences for our long-term brand engagement whilst significantly extending the group’s global reach,” JD’s executive chairman, Peter Cowgill, said in a statement accompanying today’s earnings report.
The deal allowed the British powerhouse to gain a major foothold in the American sportswear market and enabled the struggling Finish Line to compete more effectively with Foot Locker and other athletic goods sellers.
The move also came a few months after reports surfaced that the Indianapolis-headquartered chain was in talks to sell itself to JD rival Sports Direct International PLC, which is facing a major warehouse closure that has put 300 jobs at risk.
Britain’s retail industry has struggled amid uncertainty over Brexit — which has dragged down consumer spending — as well as the rise in e-commerce and concerns over a global economic slowdown. JD still boasts more than 2,400 physical stores and continues to build its online presence. Just last month, it purchased the remaining shares of Footasylum PLC in a cash deal worth 90.1 million pounds.
“JD is not immune to the widely reported challenges to physical retail in the U.K., with lower footfall on many high streets, malls and retail parks combined with cost challenges from increasing minimum wage rates and rises in business rates,” Cowgill said.
Calling out Finish Line, he added: “Whilst very conscious of the continued uncertainty surrounding the timing and nature of the U.K.’s exit from the European Union, we firmly believe that the elevated and dynamic multibrand, multichannel proposition of the core JD fascia, which enjoys the ongoing support of the key international brands, has the necessary agility to continue to exceed consumer expectations and prosper in an increasing number of international markets.”
JD also reported a 6 percent gain in same-store sales for the full year ended Feb. 2. Shares for the retailer shot up more than 5 percent to a record high of 559 pence, or $7.33, following the release of the results.
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