JD Sports Fashion Plc (LON:JD), the leading retailer of sports, fashion and outdoor brands, has announced its second quarter trading update for the 13 weeks to 3 August 2024.
Régis Schultz, CEO of JD Sports Fashion Plc, said: “I am pleased to report like-for-like sales growth of 2.4% and organic sales growth of 8.3% in the second quarter, demonstrating the strength and agility of our multi-brand model. In particular, we saw double-digit organic sales growth in North America and Europe, supported by the continued success of our JD store rollout programme. We completed the acquisition of Hibbett, Inc. just before the period end and we look forward to its contribution to the growth and development of our US business in the coming years. Based on our first-half trading, we remain on track to deliver profit within our full-year guidance.”
Trading for the Group in the period, on a constant currency basis, was in line with our expectations. Like-for-like (‘LFL’) sales were up 2.4% and organic sales were up 8.3%. As a consequence, first half LFL sales were up 0.7% and organic sales were up 6.4%. The quarter-on-quarter (‘QOQ’) trading improvement was driven primarily by the strength of our multi-brand operating model and softer comparatives with the previous year.
Regionally, LFL growth was strongest in North America (+5.7%) and Europe (+3.0%), while the UK improved materially QOQ. Organic growth was achieved in all regions, led by North America with 13.7% growth. All three main segments – JD, Complementary Concepts and Sporting Goods & Outdoor – achieved LFL growth and the JD segment benefitted from new store openings to deliver 11% organic growth.
While the overall market remains volatile, we showed good promotional discipline and managed inventory proactively to support gross margins in the period. Gross margin for the Group in the period was 48.4%, down 30 basis points (bps) on last year. This decline was seen mainly in apparel and online, where its higher penetration resulted in the UK being most impacted. The first half gross margin for the Group was therefore 48.3%, 10 bps below last year and inventory levels at the end of the period were as we expected.
We completed the acquisition of Hibbett, Inc. (‘Hibbett’) on 25 July 2024*, just ahead of the period end. Hibbett is a great addition to our Complementary Concepts segment in North America and adds material scale and presence in the US through its 1,179 stores, strengthening further our brand relationships in the world’s largest sportswear market. Hibbett, with its strong community presence, also provides an enhanced platform for the mall-led, nationwide growth of the JD brand in North America through its efficient supply chain and strong back office.
During the first half, we opened 85 new JD stores, which along with the Hibbett acquisition and the ongoing disposal of non-core stores, meant we ended the first half with 4,506 stores, up 1,189 from the start of the year.
The global macro environment remains volatile and so we continue to be cautious on our outlook for the rest of the year. Notwithstanding this, based on our first half trading and allowing for an anticipated c.£15m headwind at current exchange rates due to a stronger pound, we are maintaining our guidance range of profit before tax and adjusting items of £955m to £1,035m, on a pre-Hibbett basis.
* Sales from Hibbett will be excluded from like-for-like and organic sales metrics for the first 12 months following acquisition
Regional revenue performance
| Q225 | Like-for-like | Organic |
| UK | (0.8)% | 1.2% |
| Europe | 3.0% | 10.5% |
| North America | 5.7% | 13.7% |
| Asia Pacific | 0.1% | 10.5% |
| Group | 2.4% | 8.3% |
| H125 | Like-for-like | Organic |
| UK | (3.0)% | (1.8)% |
| Europe | 1.9% | 10.1% |
| North America | 3.3% | 10.7% |
| Asia Pacific | 0.2% | 10.5% |
| Group | 0.7% | 6.4% |
Segmental revenue performance
| Q225 | Like-for-like | Organic |
| JD | 2.7% | 11.0% |
| Complementary Concepts | 1.9% | 1.7% |
| Sporting Goods & Outdoor | 1.6% | 1.9% |
| Other | (6.0)% | (6.1)% |
| Group | 2.4% | 8.3% |
| H125 | Like-for-like | Organic |
| JD | 0.6% | 8.5% |
| Complementary Concepts | 1.6% | 1.5% |
| Sporting Goods & Outdoor | 0.7% | 1.7% |
| Other | (3.5)% | (2.6)% |
| Group | 0.7% | 6.4% |
