JD Sports on track for higher annual profits as demand for premium sportswear remains
- JD Sports organic sales up 12% after higher sales of its premium sportswear
- Shares rose 8% to 143.64p on Thursday morning.
JD Sports said it was on track to post a higher annual profit as demand for premium sportswear boosted sales.
Despite financial pressures, JD’s typically younger customer base has continued to invest in brands such as Nike and Adidas.
The retailer said revenue grew 7 per cent to £4.7 billion in constant currency terms, with organic sales growth of 12 per cent in the six months to July 29, 2023. .
King of trainers: JD Sports said it is on track for higher profits after higher sales in its premium business
Supply chain issues appear to have been resolved, with JD noting “better product availability,” which has helped generate higher revenue.
JD said it was on track to record an annual pre-tax profit of £1.04bn, up five per cent on last year.
Shares in JD Sports are up 8 per cent at 143.64p, having gained 16 per cent over the past year.
JD’s premium range, which accounts for 80 per cent of its entire sportswear business, grew 16 per cent to £3.5bn.
Operating profit fell 5 percent, which it said was “mainly due to investment in operational infrastructure.”
Its UK and Ireland businesses performed well during the period, with its premium segment increasing revenue by 8 per cent to £1.2 billion and organic sales growth of 8 per cent.
Strong footfall in Europe helped premium income grow 28 per cent to £773.8 million in the region, with organic sales growth of 27 per cent.
Mamta Valechha, equity research analyst at Quilter Cheviot, said: “While the standout performance came from Europe, which was up 27 per cent, the key focus in today’s results will be North America, where the market has been quite nervous after Foot’s profit warnings. Dick’s Locker and sporting goods.
‘JD Sports, however, is in a different ballpark than its peers and produced solid results in the face of a weakened consumer.
“Sales increased by 15 per cent and this is a great vindication of its strategy and signals the relative strength of its product offering against its peers.”
Susannah Streeter, of Hargreaves Lansdown, added: ‘JD Sports is benefiting from the resilience of US consumers, with sales in its US division growing 15 per cent.
“The appeal of a new pair of sneakers clearly continues to dominate household budgets, even as expenses decline elsewhere.”
The retailer said trading across the group had continued within expectations over the past seven weeks.
JD Sports will increase its interim dividend to pre-pandemic levels.