REG - JD Sports Fashion - JD SPORTS FASHION PLC Q225 TRADING UPDATE

JD Sports FashionAnnouncement

22/08/2024 07:01

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RNS Number : 3368B  JD Sports Fashion PLC  22 August 2024

22 August 2024

JD SPORTS FASHION PLC

Q225 TRADING UPDATE

 

Strong, agile multi-brand model delivers 8.3% organic sales growth and 2.4%
like-for-like sales growth in Q2

 

JD Sports Fashion Plc (the 'Group'), the leading retailer of sports, fashion
and outdoor brands, today announces its second quarter trading update for the
13 weeks to 3 August 2024 (the 'period').

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.

Additional information for analysts and investors has been added to our
corporate website, www.jdplc.com/investor-relations/reports-presentations
(http://www.jdplc.com/investor-relations/reports-presentations) , along with
historic restatements relating to the voluntary change in accounting policy
with regards to amortisation of acquired intangible assets and a reallocation
of FY24 segmental and sub-segmental operating profit.

* 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%

 

Enquiries:

JD Sports Fashion
Plc
            Tel:  0161 767 1000

Régis Schultz, Chief Executive Officer

Dominic Platt, Chief Financial Officer

Mark Blythman, Director of Investor Relations

 

Advisors

Bank of America - Antonia
Rowan
Tel: 0207 628 1000

Peel Hunt LLP - Dan
Webster
            Tel: 0207 418 8869

FGS Global - Rollo Head, Jenny Davey, James
Thompson
Tel: 0207 251 3801

 

Cautionary note regarding forward-looking statements

This announcement contains certain forward-looking statements relating to
expected or anticipated results, performance or events. Such statements are
subject to normal risks associated with the uncertainties in our business,
supply chain and consumer demand along with risks associated with
macro-economic, political and social factors in the markets in which we
operate. Whilst we believe that the expectations reflected herein are
reasonable based on the information we have as at the date of this
announcement, actual outcomes may vary significantly owing to factors outside
the control of the Group, such as cost of materials or demand for our
products, or within our control such as our investment decisions, allocation
of resources or changes to our plans or strategy. The Group expressly
disclaims any obligation to revise forward-looking statements made in this or
other announcements to reflect changes in our expectations or circumstances.
No reliance may be placed on the forward-looking statements contained within
this announcement.

Analyst and investor Q&A

A call with analysts and investors will take place at 0900 (BST) on 22 August
2024. To register for the live audio cast (listen only), please use the
following link: https://events.q4inc.com/attendee/957232110
(https://events.q4inc.com/attendee/957232110) . To register for the live
conference call (option to ask questions), please use the following link:
https://registrations.events/direct/Q4I259835
(https://registrations.events/direct/Q4I259835) .

Financial calendar

02 October 2024: H125 results

November 2024: Q325 trading update

January 2025: Trading update

About JD Sports Fashion Plc

Founded in 1981, the JD Group ('JD') is a leading global omnichannel retailer
of Sports Fashion brands. JD provides customers with the latest sports fashion
through working with established and new brands to deliver products that our
customers most want, across both footwear and apparel. The vision of JD is to
inspire the emerging generation of consumers through a connection to the
universal culture of sport, music and fashion. JD focuses on four strategic
pillars: JD Brand First, first priority, first in the world; leveraging
Complementary Concepts to support JD Group global expansion; moving Beyond
Physical Retail by building the right infrastructure and creating a lifestyle
ecosystem of relevant products and services; and doing the best for its
People, Partners and Communities. JD is a constituent of the FTSE 100 index
and had 4,506 stores worldwide at 3 August 2024.

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