Growth plans in focus at JD Sports after pressure on Chief Executive

JD Sports will be keen to show shareholders it is heading in a positive direction after recent reports of boardroom conflict and pressure on consumer finances.

On Thursday 20 August, boss Regis Schultz will unveil a trading update for the sportswear retailer’s performance over the second quarter of the year.

He will be hoping to highlight progress in the company’s turnaround strategy amid a testing period.

Shares in the company declined by around 15% under the leadership of Schultz after he took the role in 2022, although they have ticked almost 10% higher since the start of the year.

Softness in the global sportswear and apparel market has dragged on the group over the period, with pressure from geopolitical instability, supply chain disruption and cautious discretionary spending.

Earlier this year, the group’s previous Chairman Andy Higginson reportedly approached board members pushing for the chief executive to be replaced amid a disagreement over the firm’s trajectory.

Higginson ultimately resigned in April, with the group since replacing him with former Ikea boss Peter Agnefjall.

It is understood that Schultz has the support of JD Sports’ majority owner, the Rubin family’s Pentland Group retail vehicle.

However, this year will be key for the group’s leadership to show the strategy is working and keep shareholders on side.

Bosses have already indicated that profits are likely to decline from the year’s £852 million pre-tax figure reported last year. It has guided towards a range of between £750 million and £850 million.

Investors will be keen to see whether the company narrow this guidance or even point to an improved outlook.

Sportswear has remained broadly stable compared with decline elsewhere in the fashion and apparel industry, but key suppliers such as Nike have pointed to declining revenues recently.

Analysts at Investec indicated that they expect JD Sports’ revenues for the latest quarter to have “slowed” as a result.

The company is likely to outline how customers in the UK are currently faring as sentiment comes under pressure from concerns linked to the Middle East conflict and higher energy bills.

Richard Hunter, Head of Markets at Interactive Investor, said: “JD has no direct exposure in the Middle East but second-round effects such as the inflationary impact need to be monitored.

“Lower-income shoppers could be under pressure due to rising energy costs and any cost-of-living demands on individual budgets, particularly in its core younger market.”