JD Sports warns of muted growth as annual profit falls
JD Sports has warned of muted growth in the near term as it reported a drop in annual profit.
In the year to 31 January, pre-tax profit before adjusting items declined by 6.4% to £852 million while on statutory basis profit was down 12% to £629 million.
Subscribe to TRBHowever, sales increased by 11.7% to £12.66 billion as organic sales edged up 2.1%. Growth was seen in all regions except the UK where organic sales declined by 2.5%.
JD Sports said the UK, which represents 25% of revenue, was impacted by weaker trading at both its JD and outdoor businesses against a tough consumer backdrop.
Organic sales in North America, which accounts for 38% sales, rose by 3.2% in the year following strong online growth.
Meanwhile, sales in Europe and Asia Pacific increased by 4.2% and 8.5% respectively.
Régis Schultz, chief executive of JD Sports Fashion, said: “We delivered a resilient performance, achieving organic sales growth of 2.1% despite tough market conditions.
“Our deep understanding of our customers and lifestyle trends give us a clear view of how they want to shop and spend, allowing us to consistently deliver the right products, in the right places and at the right prices.
“This customer‑led focus, alongside disciplined cost and capital management, supported a 36% increase in free cash flow.
“In North America, our largest region at nearly 40% of sales, sales trends sequentially improved through the year, culminating in a return to like-for-like sales growth in the fourth quarter, as we optimised our ranging, supply chain and omni-channel proposition.
“We are now building on that progress with increased targeted marketing investment to support the JD brand’s expansion and build on our momentum in this key region.”
JD Sports said it made good progress in its strategic priorities in the year with the launch of automation at its Heerlen distribution centre to support JD Europe store replenishment, and its ecommerce re‑platforming programme, which will roll out to Europe and the UK later this year.
Schulz added: “These programmes are critical stepping stones in future-proofing the infrastructure for a group of our scale, creating a robust platform that enables us to operate more efficiently and drive future growth.”
Looking ahead, JD Sports said it is continuing to expect muted market growth in the near term.
Although it has no direct exposure in the Middle East, it said current uncertainty has prompted it to widen its profit guidance range, with pre-tax profit before adjusting items expected to come in between £750 million and £850 million.
