JD Sports Fashion has reported a 19.7% fall in adjusted pre-tax profit to £282 million for the first half of the fiscal year, as weaker consumer demand, footwear market headwinds and pressure in North America weighed on trading.
Group revenue fell 0.7% to £5.9 billion in the 26 weeks to 1 August, while like-for-like sales declined 2.8%.
North America saw like-for-like sales fall 4%, while Europe declined 3.3%. In the UK, like-for-like sales fell 1.4%, while Asia Pacific was the strongest-performing region, with sales up 3%.
Footwear remained the group’s largest category but sales fell as JD pointed to a shift in the global footwear product cycle and fewer major launches from brand partners. Apparel and accessories provided a brighter spot, with sales up 3.8%.
JD said its performance was also affected by a “highly promotional market” and weaker confidence among its core customer. However, it highlighted strong momentum in performance running and newer footwear styles.
Julie Palmer, Managing Partner at financial and real estate advisory group BTG, commented that mid-range price players like JD Sports had been particularly hard hit by “a raft of challenges from energy and employment costs to the squeezing of consumer spending power”. She added: “Occupying a space that hovers between value and luxury, it relies on the squeezed middle to spend. And in this climate the squeezed middle is increasingly experiencing a vice-like crush rather than a delicate pinch.”
Online sales grew 5.2% on an organic basis and now account for 20% of group sales. In the UK, JD continued its “bigger and better” store strategy, including new flagship stores in Cardiff and Sheffield.
Nike remains an important brand partner for JD, with Chief Financial Officer Dominic Platt telling Reuters that the sportswear giant was “still the most popular brand out there”.
“We think they’re doing absolutely the right things,” Platt said, pointing to Nike performance ranges including Vomero and Pegasus. “It is just a matter of time. This is a big business and big businesses don’t turn round in six months.”
Third Bridge’s Yanmei Tang said JD had historically relied heavily on Nike to drive customer traffic but was working to build stronger relationships with other brands as the sportswear giant’s recovery took longer than expected.
JD has continued to pursue international growth, including through its recent franchise agreement with Grupo Axo, which will see more than 140 JD shops launched in Mexico from 2027.
Palmer commented that JD’s focus on “international diversification could help balance a wobbly retail market in other markets such as the US and UK.”
“Ultimately, JD Sports will have to show that success bears out in its numbers to shareholders soon. But for now it seems set on driving forwards with its plan. In a tough market, if it can keep the course until brighter times then this consistency could pay off,” she added.
Despite the weaker first half, JD maintained its full-year adjusted pre-tax profit guidance of between £700 million and £800 million.
Chief Executive Régis Schultz said the group had delivered a “resilient performance against a challenging backdrop of consumer cost-of-living pressures, footwear product cycle headwinds and a highly promotional market”.