JD Sports reassures investors over full-year targets

The fashion retailer JD Sports has reassured investors that it is on track to meet full-year targets despite its key supplier Nike reporting another big slowdown in sales.
JD Sports, the self-proclaimed “king of trainers”, said its annual profit guidance range of £955 million to £1.04 billion remained unchanged but warned of a £20 million hit from the strengthening pound.
Sales in the six months to the end of July rose 5.2 per cent to £5.05 billion. Operating profit increased by 6.7 per cent to a better-than-expected £451.1 million, up from £422.7 million over the same period last year. City analysts had forecast a profit of £419 million.
At the statutory pre-tax level, profits fell 64.3 per cent to £126.3 million, down from £353.7 million, as it took a hit from the closure of its distribution centre in Derby.
Despite the news from Nike on Tuesday night, Régis Schultz, chief executive of JD Sports, said he was “confident that the global sportswear market, and in particular the athleisure space within it, has years of structural growth ahead of it, with favourable trends like casualisation and active lifestyles continuing”.
Nike posted the biggest drop in quarterly sales since the pandemic after US markets closed, although the sportswear giant did beat Wall Street profit forecasts. The shares fell 6 per cent in after-hours trading. The company warned that traffic declines across Nike-owned stores and websites were more pronounced than anticipated, leading to an inventory backlog.
Investec analysts had warned that JD Sports’ first-half results could show that “Nike’s weak innovation and promotional activity” had hurt the British firm, which is a big retailer of its products.
Nike, which has seen its crown as the No 1 sportswear brand slip of late, has been criticised for a lack of new products that appeal to Generation Z customers. Schultz has previously said that many shoppers felt “fatigue” towards familiar designs.
JD Sports, which was established in 1981 in the northwest of England, has grown over the decades to become a global sportswear retailer. Across the group it now has more than 4,500 stores, based mostly in the UK, as well as Europe and North America. Much of this growth has been driven by the rollout of new stores, acquisitions and strategic partnerships with brands such as Nike and Adidas.
JD has spent billions on acquisitions since 2017 and most recently bought the New York-listed rival Hibbett Sports in a $1.1 billion deal. The purchase, set to be completed in the second half of this year, marks its biggest move into the US market since it acquired the Baltimore-based DTLR Villa for $495 million in 2021.
The retailer said its pivot toward becoming a more “global business” had continued, with North America generating 35 per cent of revenue, Europe 31 per cent, the UK 30 per cent and Asia Pacific 4 per cent.
Its expansion marks a rare success story for a British high street retailer heading across the Atlantic. Tesco’s ill-fated attempt to break into the large and competitive US grocery market collapsed in 2012 amid an estimated £1.5 billion in losses. More recently the bootmaker Dr Martens has struggled amid logistical snarl-ups and a slowdown in consumer demand.
Shares in JD Sports fell 6p, or 4 per cent, to 143½p in early morning trading on Wednesday.