SPORT and leisurewear retail giant JD Sports Fashion posted record profits of nearly £1 billion and saw its share price jump but warned the cost-of-living crisis and other economic challenges would hamper growth in the coming year.

Announcing profit before tax and exceptional items of £947.2 million for the 12 months to January 29, 2022, up from £421.3m the previous year, the group, which markets itself as the “king of trainers”, said its revenue also soared from £6.1 billion to £8.5bn over the same period.

JD Sports Fashion, which is headquartered in Greater Manchester and has a strong presence in Scotland, attributed its performance to its sports fashion retail fascias in the UK and Republic of Ireland and also North America.

There was a strong retention of sales through digital channels in the first quarter while its stores – which include JD, Footpatrol and Scotts – were temporarily closed, combined with strong demand after reopening, the group noted. Its outdoor division – which includes the Tiso, Millets, Blacks and Go Outdoors brands – returned to profitability as demand for holidays in the UK grew and people recognised the physical and mental health benefits of spending time in the fresh air.

The group’s interim chair, Helen Ashton, pointed to “another period of outstanding progress” as it more than doubled its previous record pre-tax profit of £438.8m achieved in the period to February 1, 2020, which was the last completed financial year prior to the Covid-19 pandemic.

“This result demonstrates our capacity for growth in both existing and new markets, and the strength of our global proposition and consumer engagement in store and online,” she noted. “We are particularly encouraged by the strong performance from the group’s banners in North America.”

She said the group’s strategy will be to “continue to seek to inspire the emerging generation of aspirationally-minded consumers through a connection to the universal culture of sport, music and fashion with the highest standards of consumer experience and execution, both in stores and online”. “Building on our status as a premier global strategic partner, we will also continue to deliver a product and brand mix which is emotionally engaging, exclusive and continually evolving,” Ms Ashton said.

“While we are encouraged by the resilient nature of the consumer demand in the current year to date, we remain conscious of the headwinds that prevail at this time including the general global macro-economic and geopolitical situation.”

Despite the challenging trading backdrop, she said it was the board’s belief that “the headline profit before tax and exceptional items for the year end January 28, 2023, will be in line with the record performance for the year ended January 29, 2022”.

Meanwhile, Ms Ashton alluded to an overhaul of corporate governance and internal controls at JD Sports in the wake of the sudden departure of executive chairman Peter Cowgill who resigned last month after 18 years.

In February, the group was fined by the Competition and Markets Authority (CMA) for exchanging information with Footasylum, which it had agreed to buy for £90m. Earlier this month, JD Sports, sporting goods firm Elite Sports and Rangers Football Club were provisionally found by the UK competition watchdog to have conspired to fix prices of the Glasgow club’s clothing merchandise.

“Balancing the operational requirements of running and growing a business through a global pandemic with the obligations of elevating governance standards has been complex and not without challenge,” Ms Ashton noted.

“A number of regulatory issues have arisen through this time which, following a series of independent investigations alongside the completion of the group’s governance review, have highlighted the need for both greater relevant experience on the board and more formalisation in governance systems, risk management recording, the documentation and appraisal of internal control, and the mechanisms for reporting relevant matters to the regulatory authorities where appropriate.”