JD Sports said it achieved “impressive” performance in Europe and North America during the fiscal first half.
“We have delivered a strong first half to our financial period with organic sales growth of 12 percent and profit on track for the full year,” said Régis Schultz, CEO of JD Sports.
The premium sports fashion business achieved “impressive” performance in Europe, where sales rose 27 percent, while North America sales improved by 15 percent, Schultz said of the six months through July 29. Sales in the U.K. rose 8 percent. The positive momentum continued through the back-to-school period.
According to the company, the DTLR and Shoe Palace nameplates did notably well with “strong trading’ in the U.S. This development compares with both Foot Locker and Dick’s Sporting Goods revising their guidance after disappointing second-quarter earnings.
“Our North American businesses continue to trade well,” Schultz said. “Our market-leading proposition and continued outperformance is built upon larger and better-invested stores, a broader sales mix and compelling brand partner relationships.”
The company will open more than 200 global stores under the JD brand “in this financial period.” It added 83 new JD stores in the first half. The company is enhancing growth in Europe by investing in Iberian Sports Retail Group and Marketing Investment Group, and acquiring Gap stores in France. The company needs antitrust approval before it can officially purchase France’s Groupe Courir for 520 million euros ($572 million).
The company also signed its first JD franchise agreement in July in the Middle East with Gulf Marketing Group. The arrangement calls for 50 franchised JD stores by 2028 across the United Arab Emirates, Saudi Arabia and Egypt.
“Looking ahead, our core consumers remain resilient in the face of the ongoing global macro-economic challenges. The JD brand continues to strengthen its global presence, supported by our strategic partnerships with much-loved brands and our strong balance sheet,” Schultz said.
The company reported 4.78 billion pounds ($5.88 billion) in first-half revenue, an 8.3 percent increase from 4.42 billion pounds ($5.43 billion) a year. Profits before tax rose 25.8 percent to 375.2 million pounds ($461.1 million) from 298.3 million pounds ($366.6 million).
The company reported a “robust” 48 percent gross margin. This was 50 basis points lower than a year earlier but still outperformed pre-pandemic results. The company reported a “more normal promotional environment” for sales in the period.
According to JD Sports, sales for the first seven weeks of the second half are meeting expectations. The company said it remains on track to meet profit expectations of 1.04 billion pounds ($1.28 billion) for the year ending Feb. 3, 2024.
