JD Sports says consumer finances ‘strained’ as sales and profits drop
The drop was partly linked to a fall in sales in the UK, where it was also impacted by a number of store closures.
JD Sports has revealed weaker like-for-like sales and profits over the past half-year in the face of “strained consumer finances”.
The drop was partly linked to a fall in sales in the UK, where it was also impacted by a number of store closures, leaving the group with 13 fewer UK stores by August.
Boss Regis Schultz told investors on Wednesday that he is “cautious” about trading in the second half of the financial year.
It came as the company reported that group like-for-like sales dropped by 2.5% to £5.94 billion over the 26 weeks to August 2.
Nevertheless, organic sales were up 2.7% and total sales grew by 18% after it was buoyed by deals to buy the Hibbert and Courir brands.
The company reported that like-for-like sales dropped by 3.8% in its key North America arm and were down 3.3% in the UK.
JD Sports said its weaker UK trade was “affected by tough prior-year comparatives due to the Euro 2024 football tournament”.
It said this particularly knocked replica football shirt sales over the period.
JD Sports also reported that adjusted pre-tax profits dropped by 13.5% to £351 million over the half-year.
The group said this is in line with guidance and means it is still on track to meet its targets for the year.
Its UK business saw operating profits before adjusting items and lease interest fall 6.2% due to higher labour costs, property costs and investments in technology and cyber resilience.
Mr Schultz, chief executive of JD Sports, said: “We delivered organic sales growth of 2.7% in H1, in what remains a tough trading environment.
“This demonstrates the resilience of our business, underpinned by our agile multi-brand model, broad geographic reach and unmatched connection with customers.
“In an environment of strained consumer finances and evolving brand product cycles, operating and financial discipline remains a core focus for JD, and we are controlling our costs and cash well.
“Whilst we remain cautious on the trading environment for the second half, we expect limited impact from US tariffs this financial year, and our full-year profit before tax and adjusting items to be in line with current market expectations.”