JD Sports released interim results on Wednesday, showing signs of stabilisation in North America despite a softer picture in Europe.
JD Sports reported sales of £5.94 billion for the 26 weeks to August 2, up 18% on a reported basis, driven by the acquisitions of Hibbett and Courir, with organic sales rising a more modest 2.7%.
However, like-for-like sales declined 2.5% with softness evident in all geographical markets.
That said, North America was a reason to be positive, with improvements in both apparel and online channels, as JD gained market share in the region. The company significantly boosted brand awareness stateside and successfully integrated Hibbett operations.
European performance remained steady despite tough consumer conditions. However, the UK faced headwinds in the second quarter due to difficult comparatives from last year’s Euro 2024 football tournament, which had provided a sales boost.
JD Sports shares were almost flat at the time of writing on Wednesday.
“Overall, sales don’t tell the true story here, with total revenue rising by a seemingly impressive 20% in the period. But this growth was fuelled entirely by the acquisitions of Hibbett in the US and Courir in France last year, which are helping to flatter current performance,” said Aarin Chiekrie, equity analyst, Hargreaves Lansdown.
Chiekrie continued to explain that JD Sports was always going to have a tough time impressing the market, given the strong sales the company had enjoyed during the Euros the previous year, and that the US market was showing some signs of positivity.
“Trading across Europe and the UK remains weak, especially in the latter,” Chiekrie said. “Year-on-year numbers have come up against some tough comparables, with last year’s sales getting a foot up from the men’s 2024 Euros. The outlook for the UK remains underwhelming, with recent changes to employer taxes and minimum wages bringing a handful of extra costs and challenges.
“Across the pond, recent acquisitions cemented the US as the group’s largest region by sales. A shift of focus from expansion to raising brand awareness and squeezing the most out of its existing store footprint is a welcome one, and while like-for-like sales are still in negative territory, there are early signs that sales trends are improving.”
Despite concerns about the economic outlook, JD Sports is moving forward with a fresh buyback, which will help soften the market impact of slowing sales.
“Despite these challenges, JD’s disciplined execution and strong cash generation enabled a new £100 million share buyback, showcasing confidence in its long-term prospects,” said Adam Vettese, market analyst for eToro.
“Continued investment in omnichannel infrastructure and brand partnerships lays the groundwork for future growth, but the near-term outlook remains cautious given macro uncertainties and ongoing margin risks.”