JD Sports is a fantastic example of a British company dominating its domestic market and replicating this success through overseas expansion.
Shares in the sports fashion retailer were 6% higher in early trade on Thursday after announcing robust organic growth mainly driven by growth in North America, Europe and Asia.
“We have delivered a strong first half to our financial period with organic sales growth of 12% and profit on track for the full year,” said Régis Schultz, Chief Executive Officer of JD Sports Fashion.
“In line with our strategic plan, growth is being driven by our premium Sports Fashion business with an impressive performance in Europe (+27%) and North America (+15%), supported by a strong performance in our more mature UK market (+8%). This performance continued in the important back to school period.”
Investors will be pleased with progress in North America which represents a substantial growth opportunity for the company. However, the most exciting source of growth was Europe and Asia Pacific where JD recorded organic growth of 26.9% and 25.6% respectively.
UK revenue grew 7% to £1.2bn.
“It’s a tough place for consumer-facing companies given the uncertain macro backdrop. Consumer confidence remains fragile even though there are signs of a slowdown in the rate of inflation,” said Russ Mould, investment director at AJ Bell.
“Selling trainers and tracksuits can be big business and many people aspire to own the latest products. That said, these items aren’t cheap and so just because someone wants something doesn’t mean they can always afford it. JD Sports is aware of this situation and rightfully doesn’t assume its goods will continue to fly off the shelf at pace.
“While it is good practice to be cautious, JD Sports’ results still show a business in good health. Sales, profits and dividends are all up, it is investing in the business to support geographic growth, and it is finding new ways to keep customers happy and on its side.
“That includes a loyalty scheme trial in the UK for 10 stores in Manchester which involves customers collecting a virtual JD currency that can be used towards future purchases. These initiatives can be easy wins for retailers.”