JD Sports saw a jump in profit yesterday but remained downbeat about the outlook.
The gloomy trading forecast overshadowed better-than-expected profit figures for the past year of £81.6m, after analysts had pencilled in £79m.
Same-store sales for the year increased by 3.1 per cent, boosted by strong demand for brands such as Adidas and Nike and the firm’s own brands such as Mckenzie and Carbrini.
However, it warned that despite the strong trading it was still worried about the impact tax rises and public spending cuts would have.
“The retail environment has recently been significantly impacted by adverse fiscal changes in addition to the multiple current economic pressures,” executive chairman Peter Cowgill said.
“Against that background, therefore, it is inevitable that the board is extremely cautious in its outlook, particularly when the profits achieved for the year to 29 January 2011 are effectively rebased purely as a result of the impact of increased VAT.”
JD Sports, which last month decided against bidding for struggling rival JJB Sports, is paying a total dividend of 23p, up 28 per cent.
Analysts at Investec said JD Sports “positively surprised” with the results. However, it warned: “Management is highlighting the difficulty of passing on VAT and cost increases to its customers, so we are cutting full-year forecasts by £9m to £72m.
The retailer opened 28 stores and refurbished a further 24 in the year to January 2011.