JD Sports reported an 18.2 percent drop in pre-tax profits for the six months ending July 31, partly due to the U.S. government support it received as part of the country’s COVID stimulus package last year, which boosted year-ago results. Sales grew 13.7 percent year-over-year.

Net profits before taxes reached £298.3 million ($335.3 million) from £364.6 million a year ago. Revenue reached £4.42 billion against £3,885.8 billion a year ago.

In a statement, JD Sports said results for the first half were at the top end of the Board’s expectations, including:

  • Continued strong performance in the sports fashion retail business in the UK and Ireland which delivered a profit before tax and exceptional items for the first half of £153.0 million (2021: £174.2 million);
  • A return to profit in the sports fashion retail business in Europe, which contributed to a profit before tax and exceptional items for the first half of £57.1 million (2021: loss of £7.2 million);
  • A profit for the sports fashion retail business in North America of £130.4 million (2021: £245.5 million) with the performance in the period reflecting the non-comparability of trading conditions in the U.S. as a result of the Federal fiscal stimulus in the prior year and the supply chain challenges of certain international brands which have led to reduced availability of key footwear styles, particularly in the first quarter; and
  • Total revenue growth in organic retail businesses of 5 percent with this level of growth continuing in the second half to date, including a return to growth in the U.S.

The international development of JD continues to progress positively:

  • 51 net new JD stores opened in Europe, including its first store in Hungary, with another first store in Greece due to open shortly;
  • 101 stores now trading as JD in the U.S., with a flagship store in Chicago due to open in the second half;
  • Four JD stores in Indonesia and two JD stores in Israel opened under joint venture arrangements in the period, meaning that the core JD business now has a retail presence in 27 countries; and
  • Further progress in Australia with three new stores opened in the period and the first store in Adelaide opened subsequently.

JD’s board maintained its view that the headline profit before tax and exceptional items for the year-end January 28, 2023 would be in line with the record performance for the year ended January 29, 2022.

Andrew Higginson, non-executive chair, said in a statement, “While this has been a period of transition for the Board, it is reassuring that this has not impacted the financial performance of the Group, which continues to deliver strong results with a profit before tax and exceptional items in the first half of £383.5 million (2021: £439.5 million). With this year expected to follow a more normalized trading pattern, this result is at the top end of our expectations for the first half demonstrating the ongoing resilience of our global proposition and the strength of our consumer engagement.

“The progress that the Group is making in its global markets is reflected by the fact that total sales in the Group’s organic retail businesses were 5 percent ahead of the prior year. This performance is very encouraging, as notwithstanding the non-comparability of trading conditions in the United States, the Group has also faced numerous other challenges in the period including the well-publicized shortage of supply from a number of the international brands and the challenging global macro-economic situation.

“JD continues to be the partner of choice for many international brands who see our premium fascias as the natural home for their latest ranges and freshest new styles. Our relationship with these brands and our access to product is as strong as it ever has been.

“We are delighted to welcome Régis Schultz to the Group as Chief Executive Officer. Régis has now commenced in the role with his induction into the Group, including introductions with key business leads and international brand partners, at an advanced stage. We firmly believe that Régis has the right characteristics and experience to lead the Group on the next phase of its journey.

“We continue to be reassured by the ongoing resilience in the Group’s performance with trade to date through the second half following a similar trend to the first half with total sales in the Group’s organic retail businesses tracking around 8 percent ahead of the prior year after six weeks.

“While the overall performance continues to be encouraging and the result for the half year was at the upper end of the Board’s expectations, it must also be recognized that the most material trading periods lie ahead. Given the widespread macroeconomic uncertainty, inflationary pressures and the potential for further disruption to the supply chain with industrial action a continuing risk in many markets, it is inevitable that we remain cautious about trading through the remainder of the second half. Despite this, the Board maintains its view, at this point, that the headline profit before tax and exceptional items for the year ending 28 January 2023 will be in line with the record performance for the year ended January 29, 2022.”

Photo courtesy JD Sports