JD Sports Reports Sales Decline Amidst Strained Consumer Finances

JD Sports Sees Sales Drop Amid Economic Pressures

JD Sports has disclosed a decline in both like-for-like sales and profits for the past six months, attributing this downturn to 'strained consumer finances'. The situation has been exacerbated by a reduction in sales across the UK, where the retailer faced store closures, resulting in 13 fewer locations by August.

CEO Regis Schultz expressed a cautious outlook for the second half of the financial year, stating that the company experienced a 2.5% drop in group like-for-like sales, totaling £5.94 billion over the 26 weeks leading to August 2. Despite this, organic sales rose by 2.7%, and total sales saw an impressive 18% increase, buoyed by acquisitions such as Hibbert and Courir.

In North America, JD Sports reported a concerning 3.8% decline in like-for-like sales, while UK sales were down 3.3%. The weaker performance in the UK was partially attributed to tough comparisons from the previous year, particularly due to the Euro 2024 football tournament, which notably impacted replica football shirt sales.

Adjusted pre-tax profits also fell by 13.5% to £351 million, aligning with company forecasts and still keeping it on track to meet its annual targets. Operating profits before adjustments in the UK dropped 6.2%, influenced by increased labor and property costs, along with investments in technology.

Despite these challenges, Mr. Schultz noted, "We achieved organic sales growth of 2.7% in H1, demonstrating the resilience of our business model, geographic reach, and strong connection with customers." He emphasized that while they remain cautious about the trading environment, they expect limited impact from US tariffs this financial year, and anticipate their full-year profit guidance to meet current market expectations.