JD Sports reported a year-on-year increase of 8.3% in its total revenue to £4.78bn ($5.87bn) for H1 (the 26 weeks to 29 July 2023), while its operating profit rose 20.2% from £332.9m to £400.1m.
In terms of revenue growth by location, the UK and Republic of Ireland regions declined from £1.75bn to £1.61bn, Europe saw an increase from £1.15bn to £1.40bn, North America saw an increase from £1.30bn to £1.52bn and Rest of World saw an increase from £0.22bn to £0.26bn.
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JD Sports reports “subdued” H1 results
GlobalData’s senior apparel analyst Pippa Stephens describes the overall results as “somewhat subdued” compared to the heights it has experienced over the past couple of years.
However, she notes that on an organic basis, growth is in line at 12%, signalling the retailer’s sportswear proposition remains favourable.
Stephens believes the dampened sales in the UK and Republic of Ireland were largely due to the company being most established in these countries, alongside inflation making shoppers more careful about considering non-essential sportswear purchases.
On the plus side, she points out JD Sports’ largest segment, sports fashion, increased by 8.9% on a reported basis thanks to the athleisure trend remaining rampant and health and wellbeing continuing to be a priority for consumers.
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By GlobalDataHowever, she says: “Its outdoor division fell by 1.0%, likely due to consumers’ preferences switching back to international travel over staycations. The group’s resilience has continued in the first seven weeks of Q3, with organic sales growth in line with expectations at 10%, and it still anticipates full year profit before tax and adjusted items to hit £1.04bn.”
Stephens believes the group’s focus on M&A will help drive its performance going forwards. With French sports retailer Courir’s acquisition yet to be finalised, she highlights it presents an opportunity for JD Sports to “significantly build up its reputation and visibility” in France.
She also suggests that as Courir has strong expertise in women’s sportswear, the group could take some learnings for JD Sports, which tends to prioritise menswear: “With many of JD Sports’ brand partners like NIKE and Under Armour having a strong focus on women in sport currently, an increased focus on womenswear is now particularly important to align with these brands’ priorities and keep relationships strong.”
JD Sports Fashion Plc CEO Régis Schultz shares that the group is continuing to make good progress delivering on its strategic pillars with a focus on expanding the brand with plans to open more than 200 JD stores worldwide in this financial period.
He says: “We are going to accelerate JD brand growth in Europe through purchasing the non-controlling interest in both ISRG and MIG, and the acquisition of Gap stores in France. This is alongside the proposed acquisition of Courir in the region, which will, when completed, enhance the Group’s existing portfolio of complementary concepts, bringing into the company its market-leading focus on the female customer. Meanwhile, we are building and investing in talent and infrastructure to support future growth.”
In addition to this, Dominic Platt will be replacing Neil Greenhalgh as the chief finance officer starting October 2023.
