JD Sports reports higher sales growth in Q2 trading update
Athletic retailer JD Sports has announced increased sales globally following the opening of 85 additional stores this year. However, the company cautioned that the retail landscape remains “unpredictable.”
In its second quarter (Q2) trading update for the 13 weeks to 3 August 2024, the British sports-fashion retailer said that like-for-like sales were up 2.4% compared to the same period last year and organic sales growth by 8.3% in Q2. Sales at stores open for at least one year, which does not include new stores, also grew.
Growth was powered by North America and Europe. In contrast, year-over-year (YoY) sales in the UK slipped 0.8%. The company cited a decline in both apparel and online sales as negatively impacting UK performance.
JD Sports attributed its stronger success largely to its “multi-brand” business model and the fact that sales were weaker last year, making growth comparisons more favourable.
CEO Regis Schultz emphasised that demand remains high for sneakers and casual clothing among the company’s younger consumers. Additionally, the company enjoyed a boost from sales of replica jerseys and fan gear during the 2024 European football championship earlier this year. Schultz shared that sales of licensed products grew 35% over the previous Euro tournament and that the retailer sold nearly as many Scotland jerseys as England kits this year.
Since January, JD has brought its global store count to over 4,500 with 85 new store openings. Its acquisition of US athletic brand Hibbett for $1.1 billion further expands its American presence.
JD Sports’ management economic outlook
JD Sports management was careful to note that the “worldwide macroclimate remains unstable.” Consequently, the company said it continues to be cautious in its outlook for the remainder of 2024.
Schultz clarified this largely relates to the competitive athletic retail landscape, which has compelled many brands and sellers, including JD, to offer more promotions and discounts than usual.
Still, JD Sports is maintaining its projected pretax profit of between £955 million and £1 billion for this fiscal year.
Analyst ratings for JD Sports
LSEG data & analytics shows a consensus analyst rating of ‘buy’ for JD Sports: 4 strong buy, 6 buy and 4 hold, with an upside target at 165.57 pence, a 22% rise from current levels (as of 22 August 2024).