Shares of JD Sports Fashion (LON: JD.) opened 9% higher this morning before paring back around half of these gains on a better-than-expected set of financial results.
The sportswear retailer posted revenue of £2.5 billion for the six months ending 1 August. This is 6.5% lower compared to the last year. The lower revenue led to pre-tax profit plunging by £96.7 million to £61.9 million during the same period.
As a result, JD Sports said today it won’t pay a dividend after a big tumble in profit. The retailer joined other major companies in issuing a warning about the uncertainty and low visibility.
JD Sports didn’t pay rent for some of its stores globally.
“We firmly believe that it cannot be equitable to pay full contractual rents when there is no realistic prospect of any income from a store,” JD Sports said.
Still, investors seem to be impressed with results as the company managed to recover over 90% of revenue from the last year, despite the pandemic.
JD Sports share price initially gained nearly 10%, before paring back a portion of gains to trade around 760p, or 5% up on the day.