- JD Sports cited ‘challenging, and often volatile’ trading conditions in the UK
JD Sports profits beat analyst forecasts in the first half as sales hit a record high, with the retailer’s boss crediting the group’s multi-brand offering.
The retailer’s adjusted pre-tax profit rose 2 per cent to £405.6million over the six months to 3 August, ahead of estimates of around £384million, despite what it called a competitive and promotional marketplace.
Revenue for the period increased by 5.2 per cent to £5.03billion, with online sales accounting for 20.7 per cent of revenue.
Boost: JD Sports saw revenue for its first half climb over 5% to £5.03bn
But UK sales fell 4.6 per cent to around £1.2billion, which JD Sports said was driven by the disposal of ‘non-strategic brands’ over the previous 12 months.
The retailer flagged ‘challenging, and often volatile’ trading conditions in the UK, where it has previously reported falling revenues.
The group reiterated its guidance for an annual profit of between £955million to just over £1billion.
Chief executive Regis Schultz, said: ‘Our success is a direct reflection of the strength and agility of our global, multi-brand strategy, which allows us to adapt swiftly to fast-changing industry trends across the world.’
The multi-brand offering, which includes Nike, Adidas, On, HOKA and other brands, has helped JD Sports offset weakness in specific suppliers.
Nike on Tuesday posted disappointing quarterly sales growth, warning its upcoming festive season would likely to be filled with discounts.
Schultz added: ‘Our acquisition of Hibbett, which completed just before the period end, is a key milestone in our international development and advances the global nature of the Group through our strengthened position in the US.
‘I remain confident in the delivery of our exciting growth plans for North America and that the Group is well positioned to continue growing share in the world’s largest sportswear market.’
Dividend: JD Sports investors will be rewarded with a 0.33p interim dividend
During the period, JD Sports opened 83 new stores, including its largest store, in Stratford, London, in April.
The retailer said its JD Status loyalty programme in the US had 5.1million active members.
It added: ‘We are building a strong loyalty programme in Europe, following the successful rollout in the UK, and launched the programme into France and Poland during the period. At the period end, we had 1.8million app downloads in the UK, of which 81 per cent, or 1.4million were active members’.
The group maintained its ambitious growth targets. It said: ‘We remain focused on delivering our ambitious “triple-double” targets of double-digit sales growth, double-digit operating margin and double-digit market shares in our key markets over the course of the plan’.
Investors will be rewarded with a 0.33p interim dividend, up 10 per cent on a year ago.
JD Sports shares fell 5.16 per cent or 7.71p to 141.79p on Wednesday despite the profit beat.
Richard Hunter, head of markets at Interactive Investor, said: ‘As yet, the share price performance has not reflected the longer-term potential, with the shares some 35 per cent lower than the previous peak of 233p which was achieved in November 2021.
‘Over the last year, the price movement has been pedestrian, with a gain of just 1 per cent comparing to a rise of 10.2 per cent for the wider FTSE 100.
‘More promisingly, the shares have rallied by 26 per cent over the last three months, which could yet prove to be something of an inflection point, although the initial price reaction to the update could contain an element of profit-taking given that surge.
‘Even so, with the shares still looking extremely cheap on a historical valuation basis, and with the group increasingly laying out plans to build on its growing global footprint, the market consensus of the shares as a buy is an indication that JD Sports has much further to run’.
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