JD Sports shares held steady on Wednesday despite a near-20% fall in first-half profit, as growth in clothing helped cushion a soft footwear market and cost-of-living pressures on shoppers.
Maintaining its guidance was the saving grace for JD Sports, which wasn’t expected to post strong first-half numbers.
JD Sports shares were less than 1% lower at the time of writing.
The FTSE 100 sportswear retailer said underlying pre-tax profit fell to £282m in the 26 weeks to 1 August, from £351m a year earlier, as sales slipped 0.7% to £5.9bn.
Like-for-like sales fell 2.8%, and the gross margin edged down as the company invested in prices, particularly online, to stay competitive in a promotional market.
Statutory pre-tax profit rose sharply, but that reflected a large finance charge in the prior year rather than improved trading.
Apparel and accessories, now 36% of sales, grew around 4% and online sales rose 5%, offsetting a roughly 3% decline in footwear, which the company put down to a shift in the product cycle as some big-selling ranges reach the end of their life. North America, its largest market, was the main drag, with trading softening in the second quarter.
The company held its full-year guidance, unchanged since an August downgrade, for underlying pre-tax profit of £700m to £800m.
It pointed to a much-strengthened balance sheet, having swung to net cash of £168m from net debt a year earlier, raised its interim dividend 21% and continued a £200m share buyback.
JD Sports is a recovery play that is still recovering.