JD Sports outperforms "challenging market" and looks forward to busy sporting summer

JD Sports says it has outperformed a challenging market with a 4% like-for-like sales growth in the financial year to 3 February 2024 and is hoping for a boost from a "busy sporting summer" this year.

During the 53-week reporting period, the sports retail giant achieved total sales of £10.5 billion, up 3.6%. Like-for-likes were up 4% while organic growth was 8%. In a trading update issued this morning, it said it expected profit before tax to be in line with the £915 million to £935 million guided range.

“In our FY24 financial year, we outperformed the sportswear market, reflecting the strength of our business. 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 [earnings per share] through taking full control of [Spanish acquisition] ISRG and [Polish acquisition] MIG. We expect profit before tax for the year to be in line with the guided range given in January," said CEO Régis Schultz.

Régis Schultz

 
While Schultz expects trading conditions to remain tough in the next financial year, he was hoping for a boost from major sporting events such as the Paris Olympics and the Euro 24 football tournament in Germany this summer.

"Looking ahead, 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,” Schultz said.

Sales in the UK across the year were up by 0.8% on a like-for-like basis and up 1.5% on an organic basis, but Q4 numbers reveal that sales for that period were down 3.2% on a like-for-like basis and down 2.5% on an organic basis, reflecting JD's decision not to participate in significant promotion activity in the market, which was mainly taking place online.

The company also noted the the UK market is its strongest for apparel and apparel sales were weaker than footwear sales during the period.

Like-for-like sales in Europe were up 0.9% for the year, while North America was up 4.1% and APAC up 11.8%.

Trading during the new financial year has been in line with expectations, JD said, but the company noted that product innovation from its brand partners remained subdued while promotional activity from rivals, particularly online, remained at a high level.

"We anticipate trading conditions will improve as we move through the year, helped by a busy sporting summer, softer comparatives with last year from Q2 and an improving product pipeline towards the end of the year. Given this, Q1 is likely to be the softest LFL period of the year and H2 is likely to be stronger than H1. In addition, cost inflation remains elevated, particularly labour, and we will continue to invest in our infrastructure in FY25 to deliver our long-term growth plan," its trading statement said. Like-for-like sales growth for the next financial year is guided at between 1% and 4%.