JD Sports revises profit guidance downwards again – CEO Schultz under pressure

JD store on Mall of America

JD Sports has confirmed it will not only miss its ambitious £1billion profit target, but will come short of the previous reduced guidance it issued in November 2024.

The Bury-headquartered global sports fashion retailer told the stock market in a trading statement this morning that it expects full year profit before tax and adjusting items to be between £915m and £935m.

As recently as November a trading statement said profits would be at the “lower end of our original guidance range of £955-£1035m.”

Additional costs associated with acquisitions, and foreign exchange impacts also hit the business.

Since the last trading update on 21 November 2024 an additional acquisition costs have been factored in, including: accounting-related costs for US chain Hibbett of £6m, a £2m higher impact from FX from £15m to £17m, and profit contribution of £7m from the acquisition of French retailer Courir. 

Like for like trading over the last quarter was also down in “a challenging and volatile market”.

The statement said: “Year-to-date, like for like revenue is flat and we expect full year like for like revenue to be at a similar level to this. Organic revenue growth in the period was 3.4% and we expect full year organic revenue growth to be around 5%.”

Régis Schultz

Régis Schultz, CEO of JD Sports Fashion Plc, said: “Considering the current headwinds in the market, we performed well, delivering organic revenue growth of 3.4% across the period, and a strong Christmas resulted in like for like revenue growth in December. I would like to thank all our colleagues for the hard work and commitment they showed throughout this key part of the year.

“In line with our proven long-term approach, we chose not to participate in what was a more promotional environment in the period than we anticipated, fully maintaining our trading discipline to deliver gross margins ahead of last year, clean inventory and strong cash management.

“While I am pleased overall with our performance, market headwinds were higher than we anticipated and therefore our full year profit forecast is slightly below our previous guidance. With these trading conditions expected to continue, we are taking a cautious view of the new financial year.”

Russ Mould, investment director at Manchester investment platform, AJ Bell, said: “JD Sports was once a collector’s favourite, a place to snap up the latest trainers and keep them pristine in the hope their value would rocket. The company has now become a collector of profit warnings.

“Having already guided down full-year expectations in November, JD now says profit will be even lower thanks to weak trading in the UK and US.

“That’s triggered another sell-off in the share price and taken the stock close to the lows seen in the midst of the global market sell-off when the Covid pandemic gripped the world in 2020.”

He added: “Chief executive Régis Schultz joined as the cool cat boss in 2022 and a year later unveiled his plans for JD to be a ‘leading global sports-fashion powerhouse’.

“His nine lives are nearly up as the business has spluttered under his leadership and the goal of achieving £1bn profit has been kicked further down the road. The share price has fallen by a third since he became CEO and investors will be losing patience fast.

“The board must be seriously thinking about a replacement leader. If a different CEO isn’t on the cards and the share price continues to weaken, the company could be a prime takeover target for either a retail rival looking to strengthen its position in North America and Europe or for a private equity company flush with cash and looking for a turnaround situation on the cheap.”

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