21st May 2025 08:58
(Alliance News) - JD Sports Fashion PLC on Wednesday said sales in North America fell sharply in "volatile" markets in the current financial year as it reported a drop in annual profit.
In response, shares in the Bury, England-based sports retailer slumped 6.3% to 87.14 pence in London on Wednesday.
JD Sports said pretax profit declined 11% to GBP715 million in the 52 weeks to February 1 from GBP811 million the year prior.
Excluding adjusting items, pretax profit fell 4.0% to GBP923 million from GBP961 million, just ahead of company-compiled market consensus of GBP919 million.
The reduction reflected a GBP35 million increase in net finance expense excluding interest on lease liabilities because of lower cash balances and incremental borrowings related to the acquisitions of Hibbett and Courir.
Revenue rose 8.7% to GBP11.46 billion from GBP10.54 billion, in line with GBP11.47 billion consensus.
Organic sales growth was 5.8%, with like-for-like growth of 0.3%, JD said.
By geography, all regions grew revenue in the period other than the UK, which was impacted by non-core divestments made over the last two years. UK sales declined 4.1%, Europe revenue increased 9.5%, including two months of Courir, North America revenue grew 27% including six months of Hibbett and Asia Pacific revenue improved by 0.4%.
Gross margin of 47.8% was down from 48.0% in the prior period reflecting the acquisitions of lower-margin retailers Hibbett and Courir.
Adjusted basic earnings per share declined 3.3% to 12.39 pence from 12.81p, ahead of 12.1p consensus.
The firm lifted its final dividend by 12% to 0.67p per share from 0.60p a year prior. It upped its total payout by 11% to 1.00p from 0.90p.
JD Sports said organic sales are up 3.1% in the 13 weeks to May 3, "in line with our expectations."
Growth was driven by a 5.1% contribution from new space. LFL sales were down 2.0%, below Visible Alpha consensus of minus 1.1%, and gross margin was in line with the prior period.
Comparable sales in North America were down 5.5% in the period, offsetting modest growth in the UK and Europe. Sales were 6.5% lower in Asia-Pacific LFL.
Chief Executive Regis Schultz said: "Overall trading in the first quarter of the new financial year has been in line with our expectations in a volatile market. Despite this volatility, and uncertainty surrounding the impact of US tariff changes, we look forward into the medium term with confidence that we can continue to outperform the market, improve our profit margin and create significant value for our shareholders."
JD Sports said it does not expect the impact of US trade tariffs to be "material".
"We are taking action to mitigate any potential impact through further diversifying the range of countries from which we source own brand and licensed products, continuing to work closely with our brand partners and ongoing cost control," the company said.
Tariffs could hit consumer confidence and impact brand partners, JD Sports warned.
By Jeremy Cutler, Alliance News reporter
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