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JD Sports reported a steep drop in half-year profits following a disappointing quarterly update from key trainers supplier Nike, but the UK sportswear seller reiterated its financial guidance for the year.
Profit before tax in the six months to August 3 fell 64.3 per cent on a year earlier to £126.3mn, on revenues that were up 5.2 per cent to £5bn, largely resulting from the closure of a distribution centre in Derby as well as acquisition and divestment costs.
Profit before tax and adjusting items, its preferred metric, was up 2 per cent to of £405.6mn — ahead of analysts’ consensus of £386mn.
The group, which has been expanding globally through major acquisitions and sells brands including Nike, Adidas and Hoka, maintained its preferred profit guidance of up to about £1bn for the year.
The shares fell almost 5 per cent to 142p in morning trading in London.
Chief executive Régis Schultz, who joined in 2022, said he was confident that “the global sportswear market, and in particular the athleisure space within it, has years of structural growth ahead of it”.
His comments come after Nike reported a 10 per cent drop in quarterly sales and withdrew its full-year forecast on Tuesday as it navigates a challenging period ahead of the arrival of a new chief executive.
Schultz last year promised to transform the FTSE 100 company into a “leading global sports-fashion powerhouse” as it seeks to open as many as 1,750 stores worldwide over a five-year period. Earlier this year, it snapped up US rival Hibbett in an £878mn deal.
JD Sports said like-for-like sales in Europe and North America rose 1.7 per cent and 3.3 per cent respectively, while like-for-like trading in the Asia-Pacific region was down on a year earlier.
Analysts at Peel Hunt said the retailer “delivered impressive sales-led profit growth in a half when many competitors struggled badly in all territories”, but cautioned that in North America it was heavily reliant on how Nike products sell.