JD Sports focus on global expansion
JD Sports has enjoyed a strong Christmas trading period and expects to announce annual profits of over £1billion.
But the Bury-based fashion retail giant has used a trading statement to double down on its commitment to seek growth overseas.
Second half total revenue growth for the 22 weeks to 31 December 2022 ran at 10%, compared with growth of 5% for the first half as reported in the interim results on 22 September 2022. In particular a strong Christmas with total revenue growth over the six-week period to 31 December 2022 of more than 20%.
Régis Schultz, chief executive of JD, said: “The engagement and commitment of our teams through the peak trading period has been phenomenal with many of our stores and websites delivering record sales and JD’s market-leading product and retail experience capturing the imagination of customers globally like never before.”
“Our strategic focus on the international and digital expansion of our global premium sports fascias is underpinned by the continued strength of these businesses.”
In December TheBusinessDesk.com reported that JD had jettisoned several UK brands in sale to arch rival Frasers, owners of Sports Direct, in a £47.5m deal.
In the trading statement JD said the business was “encouraged” by the performance of the brand overseas. “Notably, our businesses in North America have, as expected, recovered strongly delivering growth of more than 20% through the second half to date. This improvement reflects both the improved availability of product in all of our banners and the positive momentum in the development of the JD fascia with 134 stores now trading as JD across the United States and Canada. Elsewhere, our businesses in the UK and Republic of Ireland, Europe and Asia Pacific have maintained their first half momentum, both in stores and online, which is reassuring and demonstrates the ongoing resilience of our proposition and the enduring strength of our multi-channel consumer engagement.”
JD expects profit before tax and exceptional items for the year ended 28 January 2023 will be “towards the top end of current published market expectations” from £933 million to £985 million, depending on the January post-Christmas sales… assuming current exchange rates, we estimate that the Group’s headline profit before tax and exceptional items for the full year to 3 February 2024 will be just over £1 billion.
Russ Mould, investment director at Manchester investment platform AJ Bell, said: “The trends suggest clothing retailers have held up well over Christmas with JD Sports following in Next’s footsteps as it announced bumper festive trading.
“This is a story of the survival of the fittest. Weaker retailers have fallen by the wayside as the likes of Next and JD have come to the fore – the latter even enjoying highest ever weekly sales in the run-up to Christmas.
“This is testament to the continuing appeal of the brands which fill JD’s stores and to a youthful consumer who are often living at home and, therefore, don’t have utility bills, rent or a mortgage to pay.
“JD is also benefiting from improved availability of products and easing shipping costs – two headwinds which had an impact on profitability in 2022.”
He added: “All eyes will now be on a big investor day at the beginning of February when JD will be expected to update on its digital strategy and what it intends to do with its increasingly large pile of cash.”
