JD Sports reports record interim results and remains on track to deliver £1bn profit goal

International athleisurewear retailer, JD Sports Fashion, reported record interim results this morning, and confirmed it is still on track to deliver more than £1bn of profits in its full year.

The Bury-based group achieved a 6.8% increase in revenues in the six months to August 3, 2024, to £5.032bn.

Pre-tax profits, before adjusting items, came in at £405.6m, a 3.4% improvement on the previous year. Profit before tax fell from £353.7m last year to £126.3m, a 64.3% decline which the group said reflected mainly non-cash items, including the closure of its Derby distribution centre.

JD Sports revealed net cash before lease liabilities of £40.8m, after stores investment and acquisitions.

The group increased its stores portfolio by 1,189, to a total of 4,506 outlets, reflecting new openings, ongoing disposal of non-core stores and the Hibbett acquisition.

In April this year JD Sports agreed a billion-dollar deal to buy major American retailer Hibbett that will add more than 1,000 stores to the group.

Hibbett is a sports fashion-inspired retailer and has 1,169 stores spread across 36 states.

JD’s latest UK store will open tomorrow (October 3) in Stockport, occupying 13,000 sq ft of the former BHS building in Merseyway shopping centre, replacing its two existing stores within the town centre.

The interim dividend has been increased by 10% on the prior period, to 0.33p per share.

JD Sports chief executive, Régis Schultz, said: “We have today reported record interim results with group revenue of £5.0bn, and profit before tax and adjusting items of £405.6m, underscoring our ability to outperform the sector in a volatile global marketplace.

“Our success is a direct reflection of the strength and agility of our global, multi-brand strategy, which allows us to adapt swiftly to fast changing industry trends across the world, and our operational excellence. This ensures we continue to deliver an industry-leading customer proposition both in store and online.”

He added: “Organic sales growth in the first half was 6.4% and our underlying operating margins were in line with last year, notwithstanding continued cost investment in our long term growth. We are reiterating our previous profit before tax and adjusting items guidance range of £955-£1,035m.

“Our acquisition of Hibbett, Inc, which completed just before the period end, is a key milestone in our international development and advances the global nature of the group through our strengthened position in the US. I remain confident in the delivery of our exciting growth plans for North America and that the group is well positioned to continue growing share in the world’s largest sportswear market.

“I am very proud of our teams across the globe, whose dedication and hard work have been instrumental in achieving these results. Our strong business model and clear strategy position us to deliver long term growth and value creation for our shareholders.”

The group said its trading performance in the first half was in line with expectations.

It added that, as highlighted at the Q225 trading update, it is experiencing currency headwinds this year as the pound strengthens against the US Dollar and the Euro.

Its guidance range of £955-£1,035m was based on certain exchange rates. Foreign exchange impacts reduced profit before tax and adjusting items by £6m in H1 and, at current rates, the group expects the H2 impact to be £20m.

It expects Hibbett to contribute c.£25m profit before tax and adjusting items in the full year, reflecting the business contribution from completion, acquisition accounting adjustments and a £25m interest cost from the new acquisition facility.

Dan Coatsworth, investment analyst at Manchester investment platform, AJ Bell, said: “JD Sports’ better than expected first-half profit shows that demand is still robust for trainers and tracksuits.

“JD Sports is seeing stronger trading in footwear than apparel, although growth is being achieved in both areas. Poor weather has hampered clothing sales, yet JD says demand was strong for casual footwear.

“The beauty of JD’s model is that it isn’t reliant on a single brand to do well. Instead, it stocks a range of brands, from On and Adidas to Hoka and Converse, and that gives it flexibility to capitalise on the most in-demand products.”