In FY24 JD Sports Fashion reports LFL sales growth of 4.2% but a notable weakening trend in Q4 of 0.1% which Shore Capital research analyst Clive Black believes will “feed into FY25 and the shape of that year.”
Total organic sales grew by 8.4% in the year but 4.4% in Q4. Meanwhile, the company’s total sales rose 3.6% to £10.5bn after a -6.2% hit from disposals and a 1.4% benefit from the 53rd week.
The driving force behind JS Sports Fashion’s like-for-like (LFL) sales growth in the fourth quarter was its 215 new store openings in Europe, North America and Asia-Pacific, however, its UK and Ireland sales fell by 3.2% due to the region having the highest apparel sales mix in the group and apparel performance was weaker than footwear.
The retailer said it also chose to offer fewer online discounts than its competitors.
Europe Q4 LFL sales were up 0.9% due to stronger trading in Southern Europe specifically Portugal and Italy which were offset by weaker trading in Northern Europe. That was down to a higher apparel mix in the north. The effects of new store openings across Europe helped deliver Q4 organic growth of 8.9%.
North America Q4 LFL sales rose 2.1% against a previous year's comparative of over 30% growth in a “highly promotional” market whilst new store openings drove organic sales up to 7.7%.
Asia Pacific Q4 LFL sales were up 8.3% with help from all main markets and particularly strong growth in New Zealand and Thailand as new stores delivered organic growth of 12.3%.
Commenting on the results Régis Schultz, CEO of JD Sports Fashion Plc said: We achieved like-for-like sales growth of over 4%, organic growth of over 8% and our athleisure fascias achieved organic growth of over 10%.
“We made good strategic progress, opening 215 new JD stores, and focusing our effort on developing JD and enhancing EPS through taking full control of ISRG and MIG. We expect profit before tax for the year to be in line with the guided range given in January.”
JD Sports FY24 LFL region snapshot:
- UK and Ireland LFL sales were up 0.8% with organic sales growth of 1.5%,
- Europe LFL sales were up 7.7% with organic sales growth of 15.3%,
- North America LFL sales were up 4.1” with organic sales growth of 9.3%,
- Asia Pacific LFL sales were up 11.8% with organic sales growth of 17.7%
JD Sports affirmed the £915-935m guided range it gave at the start of the year, which was down from a previous guidance of £1.04bn profit, which came as a sigh of relief for Black who said this could mean a “modest beat” within the guidance and a potentially higher base.
Looking ahead Schultz said: “The current trading environment remains challenging due to less product innovation and elevated promotional activity, especially online. We anticipate trading conditions will improve as we move through the year, helped by a busy sporting summer and softer comparatives with last year.
“We continue to invest in our people and the infrastructure needed to deliver our long-term growth plan. I am excited about the opportunities for the JD Group going forward and our ability to deliver attractive returns to shareholders."
Given this, the sportswear retailer anticipates Q1 to be the softest LFL period of the year and H2 is expected to be stronger than H1. Whilst cost inflation remains elevated, particularly labour, JD Sports states it will continue to invest in its infrastructure in FY25 to deliver on its long-term growth plan.
