JD Sports published its first-half results on Wednesday, revealing a mixed performance as acquisitions boosted sales but profitability came under pressure.
For the six months to early August, reported sales rose 18% (+20% at constant currency) to reach US $ 8.02 billion, largely driven by the acquisitions of Hibbett and Courir. Gross margin slipped to 48% from 48.6%.
Operating profit declined 8.2% on a reported basis to US $ 498 million, with the operating margin narrowing to 6.2% from 8%. Profit before tax and adjusting items fell 13.5% to US $ 474 million. On a statutory basis, however, operating profit increased 33.2% to US $ 525 million, while profit before tax rose 9.5% to US $ 186 million.
Organic sales grew 2.7% during the half, which chief executive Régis Schultz said underlined the business’s resilience. Like-for-like (LFL) sales dropped 2.5% overall, with North America down 3.8% LFL but up 3.1% organic; Europe down 0.3% LFL and up 6% organic; the UK down 3.3% LFL and 1.7% organic; and Asia Pacific up 2.4% LFL and 6% organic.
North America remained the largest market, accounting for 39% of group sales, followed by Europe (32%), the UK (25%) and Asia Pacific (4%). LFL sales in Europe were supported by its sporting goods fascias in Iberia, Greece and Cyprus, while trends improved quarter on quarter in both North America and Asia Pacific. JD also grew market share in North America and Europe.
By segment, the JD brand saw total sales fall 3% LFL and rise 3.7% organic to US $ 4.96 billion. Complementary Concepts, which includes Hibbett, DTLR, Shoe Palace, City Gear, Courir and MIG, reported sales of US $ 2.12 billion, down 2.4% LFL but up 1.1% organic. Sporting Goods & Outdoor, including ISRG in Iberia, Cosmos in Greece and Cyprus, and Go Outdoors, Blacks and Millets in the UK, was flat LFL and down 0.8% organic at US $ 944 million.
Schultz said the half had played out against a challenging consumer backdrop. He added that North America remained a key growth engine, where JD had gained market share. He also pointed to supply chain investments set to deliver efficiencies, with automation soon to launch at its European distribution hub in Heerlen, the Netherlands, and a US west coast facility in Morgan Hill due to go live by year-end.
He emphasised positives including market share gains in North America and Europe, disciplined cost and cash management, improved apparel and online sales in North America, and resilient LFL sales in Europe. UK sales were affected by tough comparatives against last year’s Euro football tournament.
Globally, apparel delivered strong underlying growth, although footwear was softer amid product cycle shifts. Newer performance-based footwear lines performed well, however. Footwear’s share of group sales rose from 60% to 62% year on year, boosted by the acquisitions of Hibbett and Courir. On an organic basis, footwear sales dipped about 1% to US $ 3.91 billion, while apparel rose 6% to US $ 2.16 billion.
Looking to the second half, the company said the impact of US tariffs should be limited but warned that the environment remains challenging given consumer pressures, unemployment risks and the footwear cycle transition. Nevertheless, it maintained guidance that full-year profit before tax and adjusting items will be in line with current market expectations.
