JD Sports Profits Drop In Turbulent Market

May 31, 2024

JD Sports has announced a decline in full-year pre-tax profit amid a “challenging and volatile” market, following a two-day delay in releasing its results.

The sports retailer reported a profit before tax and adjusting items of £917.2 million, a 7.5 per cent decrease. This dip was attributed to ongoing investments in its supply chain and the opening of several new stores.

Despite a nine per cent sales growth, revenue for the 12 months up to January rose by just 2.7 per cent, reaching £10.5 billion.

Earlier in the week, JD Sports surprised investors by postponing the release of its full-year results without explaining. This came after the company had downgraded its profit forecasts for the financial year in January, citing increased discounting and reduced customer spending.

Although shares have dropped over 18 per cent year-to-date, they remained largely unaffected by the results delay.

The company noted that the first quarter performance was largely in line with expectations and maintained its forecast for a pre-tax profit of between £955 million and £1.04 billion for 2024.

Last month, JD Sports announced a significant acquisition, agreeing to pay £878 million for Hibbett, a retailer based in Alabama with stores in 36 states. CEO Régis Schultz has ambitious plans for the US market, aiming to open around 700 new stores over the next four years.

In his statement, Schultz highlighted the strong revenue performance despite the challenging market conditions, particularly during peak trading periods. He emphasized the strategic progress made, including the opening of over 200 new JD stores, proposed acquisitions like Courir and Hibbett, and investments in governance, organization, and infrastructure to support the company’s growth strategy.

Schultz reiterated that the first quarter of the new financial year met expectations despite market volatility and expressed confidence in meeting the full-year profit guidance. He also underscored the company’s strong business model and clear strategy for long-term growth and value creation for shareholders.

JD Sports currently operates over 3,337 stores worldwide, offering brands such as Nike and North Face.

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