The company experienced strong sales during the back-to-school period of Q3 but saw ‘much softer consumer demand and trading’ toward the end, with signs of reduced demand in the US ahead of the election.
Within this revised guidance, which sent its shares down 16.6% in London trading, the UK sporting goods retailer expects Hibbett to contribute approximately £25m to PBT. Additionally, based on current exchange rates, it foresees a £15m reduction in PBT compared to the rates used when the original guidance was set.
Despite these challenges, JD Sports Fashion CEO Régis Schultz said that the company remained focused on executing its long-term commercial strategy rather than prioritising short-term sales.
As a result, the group's gross margin for the period rose by 0.3 percentage points to 48.1%, bringing the year-to-date gross margin to 48.2%, consistent with the same period last year.
The company reported a 5.4% increase in organic sales growth for the third quarter of fiscal 2025, maintaining a positive trajectory amid a volatile retail environment.
The year-to-date organic sales growth stands at 6.1%, compared to the same period last year, showcasing resilience in its store rollout programme.
Like-for-like (LFL) sales were slightly down by 0.3%, as a softer October counterbalanced strong performance in August and September. Nonetheless, year-to-date LFL sales witnessed modest growth of 0.5%. Notably, physical stores surpassed online sales, and footwear outshone apparel during this quarter.
All segments, including JD and Complementary Concepts as well as Sporting Goods & Outdoor, contributed to this organic sales uplift over the 13 weeks leading to 2 November 2024.
Europe gave some respite with a 10.4% increase in organic sales in Q3 FY24, while North America and Asia Pacific also posted solid gains of 5.9% and 5.0% respectively.
The company's aggressive expansion continued with the opening of 79 new JD stores in the quarter, bringing the total number of new outlets to 181 by the end of Q3. The acquisition of Hibbett has expanded JD's store count to 4,541, an increase of 1,224 since the beginning of the year.
JD Sports Fashion CEO Régis Schultz said: "After a good start to the period, helped by strong back-to-school sales, we saw increased trading volatility in October, particularly in North America and the UK, reflecting elevated promotional activity and mild weather.
“We have performed well in the key trading events this year and we are well positioned for the upcoming peak season. The trading environment remains volatile though and, following October trading, we now anticipate full year profit to be at the lower end of our guidance range."
Alice Price, apparel analyst at GlobalData observes: "JD Sports has experienced yet another rocky performance, with like-for-like sales (l-f-l) in Q3 FY2024/25 rising a meagre 0.3%, as despite strong back-to-school sales helping the quarter get off to a promising start, it was offset by subdued demand in the latter part of the period. This was a result of several factors, including high promotional activity, mild weather suppressing demand for winter collections, and consumer uncertainty in the US prior to the election. Group organic revenue rose a more robust 5.4%, supported by its slew of store openings, with 79 JD stores opening globally, taking its total number of openings this year to 181.
“The JD fascia continues to outperform the total group, with sales rising 6.2% in Q3. However, its performance remains propped up by its comprehensive store expansion strategy, with l-f-l sales experiencing a decline of 1.6%, as consumers spend cautiously, with the wider sportswear market still experiencing suppressed demand. JD’s Complimentary Concepts segment – which includes brands such as DTLR and Shoe Palace – also witnessed a notable l-f-l decline of 1.3%, with its organic sales up just 0.4%, as demand for streetwear begins to soften. The real winner during the period was JD’s Sporting Goods & Outdoor division, which saw l-f-l sales rise 6.0%, and organic revenue increase 5.5%, as consumers regain an appetite for outdoor experiences, and staycations come back into favour amid the normalisation in demand for foreign travel post-pandemic.
“Europe stood out as JD’s best-performing region during the quarter. This comes as inflation stabilises in the region, and consumers feel more confident about their finances. Despite easing inflation in the US, its performance has been weaker as consumer appetite was suppressed by uncertainty surrounding the election in November. Asia-Pacific’s growth of 5.0% remained propped up by store openings, with l-f-l sales decreasing 3.8% as consumers in the region continue to favour domestic brands such as Anta and Li-Ning, and regions such as China and Japan face economic headwinds. Meanwhile, the UK was the only region to experience a decline in organic revenue, decreasing by 0.1%, as JD focuses its attention on opening stores in its less established regions, while l-f-l sales declined 2.4% as the UK continues to grapple with subdued consumer appetite.”
In May this year, JD Sports proposed to buy 100% of the issued share capital of Courir for an enterprise value of €520m.
In its second-quarter of the fiscal, JD Sports revealed 2.4% like-for-like sales growth and organic sales growth of 8.3%.
