Companies

Short term outlook for JD Sports remains challenging

Apr 4, 2024 United Kingdom

The UK-based sports retailer has reported a 3.6% year-on-year sales growth in its fiscal 2024, but expects the trading environment to remain challenging in the first half of the current year

“In our FY24 financial year, we outperformed the sportswear market, reflecting the strength of our business. We achieved like-for-like sales growth of over 4%, organic growth of over 8% and our athleisure fascias achieved organic growth of over 10%. We made good strategic progress, opening 215 new JD stores, and focusing our effort on developing JD and enhancing EPS through taking full control of ISRG and MIG. We expect profit before tax for the year to be in line with the guided range given in January”, commented Régis Schultz, CEO of JD Sports Fashion.

Fiscal 2024 Results

According to its latest trading update, the company’s total sales for the year that ended on the 3^rd of February reached 10.5 billion British pounds (12.2 million euros), up by 3.6% from the previous year (including a minus 6.2% impact from disposals and a 1.4% benefit from the 53^rd week).

JD Sports added that fourth quarter like-for-like sales on a constant currency basis were marginally ahead of the previous financial year, as “January was slightly down year-on-year due to elevated promotional activity in the market, particularly online, and against a very strong comparative of c.25% growth”. However, for the full year, like-for-like sales were up by 4.2%, with all regions ahead of fiscal 2023 with organic sales growth of 8.4%.

The company ended the fiscal year 2024 with a gross margin of 47.3%, down by 50 basis points from the prior year, mainly thanks “to a higher mix of sales from Europe and North America, where margins were impacted by the elevated promotional activity in those markets”. JD Sports also said that it was pleased with its year-end cash position of more than 1 billion British pounds.

Finally, its profit before tax for financial 2024 is expected to be in line with the revised guidance range of 915 million British pounds (1.06 billion euros) to 935 million British pounds (1.09 billion euros).

Fiscal 2025 Outlook

“Looking ahead, the current trading environment remains challenging due to less product innovation and elevated promotional activity, especially online. We anticipate trading conditions will improve as we move through the year, helped by a busy sporting summer and softer comparatives with last year. We continue to invest in our people and the infrastructure needed to deliver our long-term growth plan. I am excited about the opportunities for the JD Group going forward and our ability to deliver attractive returns to shareholders”, concluded the CEO of the company.

For fiscal 2025, JD Sports expects like-for-like sales growth of between 1% and 4% and organic revenue growth of between 6% and 9%, on a pre-adjustment basis. Profit before tax is expected to be in the range of 900 million British pounds (1.05 billion euros) to 980 million British pounds (1.14 billion euros).

1 British Pound = 1.17 EUR

Image Credits: mallofamerica.com

United Kingdom Companies JD Sports Quarter Results Results Sportswear Year Results