JD Sports Fashion Plc, the parent of the JD, Hibbett, Finish Line, DTLR, and Shoe Palace retail brands in the U.S. and JD and others worldwide, reported interim results for the 26 weeks ended August 3 (first half, H1), delivering organic sales growth of 6.4 percent and like-for-like (LFL, Comp) growth of 0.7 percent year-over-year (y/y).

Revenue grew 5.2 percent to £5.03 billion in the first half, including £61 million from 10 days of Hibbett trading. JD Sports is using a conversion rate of $1.34 = 1 British Pound (£) or €1.20 = 1 British Pound (£) for current reporting. JD completed its acquisition of Hibbett on July 25.

Gross margin amounted to 48.2 percent of net sales, or 48.3 percent excluding Hibbett, in the first half, which was down 10 basis points y/y, reportedly driven by lower Q2 margin from elevated promotional activity across apparel and online.

Operating margin before adjusting items was 9.0 percent of net sales, or 8.8 percent excluding Hibbett, which was said to be in line with the prior-year H1 period, with good cost control offsetting future growth investment.

Profit before tax and adjusting items amounted to £405.6 million in H1, up 2.0 percent y/y, and up 3.4 percent on a constant-currency (cc) basis and flat excluding Hibbett.

Profit before tax of £126.3 million in the half reflected mainly non-cash adjusting items including updated Genesis put and call option valuation following the acquisition of Hibbett and the closure of the Derby distribution centre (DC)

Adjusted basic earnings per share (EPS) were up 4.5 percent for the first half, while basis EPS fell 90.1 percent year-over-year.

The company said it saw continued balance sheet strength in the first half, with net cash before lease liabilities of £40.8 million, after stores investment and the acquisitions of the ISRG/MIG NCIs and Hibbett.

The company os proposing an interim dividend of 0.33 pence, up 10 percent versus the prior-year H1 period.

JD Sports ended the first half with 4,506 stores, up 1,189 from the start of the year, reflecting store openings, ongoing disposal of non-core stores and the Hibbett acquisition. Hibbett brought 1,179 stores to the table.

Strategic Highlights
Continued strong progress across the company’s four key strategic pillars:

JD Brand First: Rolling Out the Company’s No.1 Nameplate

  • Double-digit organic growth across Europe, North America and Asia Pacific
  • Opened 83 new JD stores, including the largest ever JD store in Stratford, London in April, and on track to open around 200 new JD stores in the full year
  • Transferred an additional 19 stores to JD from Finish Line in the U.S., MIG in Eastern Europe and ISRG in Iberia

Complementary Concepts: 

  • Completed acquisition of Hibbett and its 1,179 stores in the U.S.
  • Completion of the Courir in France acquisition remains subject to clearance from the European Commission.
  • JD Sports saw 3.4 percent LFL sales growth from existing U.S. community nameplates and 4.5 percent LFL sales growth from Sporting Goods nameplates.

Beyond Physical Retail:

  • Good progress on omni-channel: ‘ship from store’ rolling out across Europe and successful ‘click and collect’ trial in France.
  • Strong uptake in the JD STATUS loyalty program in the UK following its full launch in December 2023 with 1.4 million active members so far; STATUS also launched in France and Poland.
  • Supply chain evolution continued: Heerlen operating manually with automation now anticipated in 2025 and
    rationalizing UK operations around Kingsway, leading to the announced Derby closure.

People, Partners & Communities:

  • First global partner of the Nike Connected program following U.S. launch demonstrates strength of long-term brand relationship.
  • Expanded community outreach through the JD Foundation, hosting our first “JD UP” careers event in Manchester reaching 2,500 young people with plans to roll out further.
  • JD saw 26 percent reduction in Scope 3 emissions on purchased goods.

Outlook and Guidance
The company said its trading performance in the first half was in line with its expectations and overall profit guidance range of £955 million to £1,035 million remains unchanged.

“As highlighted at our Q225 trading update, we are experiencing currency headwinds this year as the pound strengthens against the U.S. dollar and the Euro. Our guidance range of £955-1,035m was based on certain exchange rates,” the company noted in its report summary. The £955 million to £1,035 million guidance range was based on $1.25 for the U.S. dollar and €1.15 for the Euro.

Foreign exchange impacts reduced profit before tax and adjusting items by £6 million in H1 and, at current rates, JD Sports expects the H2 impact to be £20 million.

The company said it expects Hibbett to contribute about £25 million profit before tax and adjusting items for the full year, reflecting the business contribution from completion, acquisition accounting adjustments and a £25 million interest cost from the new acquisition facility.

Image courtesy Hibbett/JD Sports Fashion Plc