JD Sports: Revenue hits record as US expansion pays off

JD Sports has reported record revenue in the first half of the year after a pick-up in sales and the acquisition of American retailer Hibbett.

Revenue at the retailer reached just over £5bn in the 26 weeks to 3 August 2024, up by 5.2 per cent year on year.

Profit before tax rose by two per cent to £405m, while earnings per share rose 4.5 per cent to 5.15p.

Like-for-like sales growth in the first half of the year was 0.7 per cent, and underlying operating margins were in line with last year. Its gross margin fell by two per cent in a “volatile market”, JD said.

The pick-up in sales will be a relief for investors. JD Sports had downgraded its profit forecasts for the financial year in January due to higher discounting in its stores and reduced customer spend.

Shares in the high street slumped after the downgrade, but have slowly recovered losses in recent months. Shares in the retailer have risen more than 12 per cent in the past month.

Earlier in 2024, JD Sports said it would pay £878m for Hibbett, an Alabama-headquartered ‘fashion inspired’ retailer with stores in 36 states across the States.

The sale, which has now completed, will account for about 40 per cent of revenue in what is already JD Sport’s largest region by revenue.

Chief executive Régis Schultz has ambitious expansion plans for the American market, with around 700 new stores planned over the next four years.

In a statement, Schultz said: “Our success is a direct reflection of the strength and agility of our global, multi-brand strategy, which allows us to adapt swiftly to fast-changing industry trends across the world, and our operational excellence.”

“Our acquisition of Hibbett, which completed just before the period end, is a key milestone in our international development and advances the global nature of the Group through our strengthened position in the US. I remain confident in the delivery of our exciting growth plans for North America and that the Group is well positioned to continue growing share in the world’s largest sportswear market.

“I am very proud of our teams across the globe, whose dedication and hard work have been instrumental in achieving these results. Our strong business model and clear strategy position us to deliver long-term growth and value creation for our shareholders.”

JD Sports said its trading was “in line with expectations”, and its overall guidance range of £955m-1,035m remained unchanged.

Clive Black, Equity Analyst said: “JD is a very substantial and still highly profitable firm albeit year on year it has certainly confronted quite a few challenges. As ever, challenge leads to probing questions and uncertainty, which may be elevated today over Nike’s poor overnightnews flow.

Whilst so, it is pleasing to see the  stabilisation  of  underlying  guidance  and  so  anticipated  earnings,  reflecting  we  assert  the steadying hand of CFO, Dominic Platt and his team, who came into the firm in something of a tumult.”