JD Sports eyes global potential as UK hinders FY23/24 growth

Posted by Admin May 31, 2024 Sports

JD Sport’s CEO, Régis Schultz, believes the latest results overall are evidence of JD Sports’ “strategic progress” amid challenging market conditions. Credit: Shutterstock.

JD Sports said its revenues increased 2.7% to £10.5bn ($13.35bn) for the 53 weeks to 3 February 2024, compared with the previous year.

JD Sports’ profit before tax and adjustments declined by 8% to £917.2m, which was slightly lower than the company’s previously stated guidance range of £915-935m.

A notable positive was the 11% growth in organic sales for JD Sports’ premium product range.

However, its UK business experienced an 8.3% decline in revenues to £3.51bn due to the group’s non-core divestments made over the last two years.

GlobalData apparel analyst Louise Deglise-Favre said the company’s performance was “once again dragged down by the UK” and attributed the decline to a “dampened consumer demand”.

“This echoes the steep decline of the apparel sector in the country since the beginning of the year,” she added.

Access the most comprehensive Company Profiles
on the market, powered by GlobalData. Save hours of research. Gain competitive edge.

Company Profile – free
sample

Your download email will arrive shortly

We are confident about the
unique
quality of our Company Profiles. However, we want you to make the most
beneficial
decision for your business, so we offer a free sample that you can download by
submitting the below form

By GlobalData

Tick here to opt out of curated industry news, reports, and event updates from Just Style.

Visit our Privacy Policy for more information about our services, how we may use, process and share your personal data, including information of your rights in respect of your personal data and how you can unsubscribe from future marketing communications. Our services are intended for corporate subscribers and you warrant that the email address submitted is your corporate email address.

In contrast, Europe’s revenue increased 16.3% to £3.1bn, North America’s revenue increased 8.4% to £3.5m and Asia Pacific’s revenue increased 7.5% to £524.8m. Deglise-Favre noted that this is likely to do with consumers in these regions feeling the easing of inflation.

The company’s CEO Régis Schultz remained positive about the latest results as evidence of JD Sports’ “strategic progress” amid challenging market conditions, including rising operating costs and a highly promotional market environment.

The group was also boosted by the opening of more than 200 shops across 23 countries in FY24 and plans to open a further 200 over the current financial year.

Footwear continued to perform strongly with revenue growth of 8.2% to £5.9m, while apparel revenue, impacted by the milder Autumn/Winter weather, declined 4.3% to £3.5m. Through this, the CEO observed a continuation to build a good mix of products delivering a “head-to-toe” shopping opportunity for consumers.

JD Sport’s retail stores revenue in FY24 grew by 8.9% to £7.9m with its online channel declining by 7.6% to £2.4m, which Schultz explained reflected the continued shift to pre-pandemic online participation and investment in its stores.

Despite the difficult market Schultz said he remains “confident” in the global sportswear market, in particular the athleisure space which he said has “many years of structural growth ahead of it.”

Key highlights from JD Sports FY24 results:

Operating profit rose to £973.9m,
Adjusted basic earnings per share down 9.1%
Profit before tax and adjusting items was £912.4m, down 8.0%,
Gross margin was 48.0%, down slightly from the prior period.

“We have started the new financial year with Q1 in line with our expectations in a volatile market and we are on track to deliver our profit guidance for the full year,” added Shultz. “Looking further ahead, we have a strong business model and a clear strategy to deliver long-term growth and value creation for our shareholders.”

At the start of the year, the retailer blamed “cautious consumer behaviour” and milder weather for a “softer” quarter.

Deglise-Favre believes the group’s performance will pick back up in H2, boosted by the Paris Summer Olympics and an improvement in consumer confidence.