JD Sports Fashion reported an 11.4 percent decline in profit before exceptional items and taxes to 418.1 million pounds (€478.3m) for the first half ended July 31. Total period revenues increased by 13.7 percent to £4,418.1 million (€5.1bn) from £3,885.8 million, as total sales growth in organic retail businesses rose 5 percent. H1 operating profit was down 16.1 percent to £332.9 million (€380.8m), as gross margin came in flat at 48.6 percent.
The U.K.-based retailer, citing widespread macro-economic uncertainty and inflationary pressures, is cautious about its second-half outlook. But it is invigorated by the turnaround in its European retail business, which contributed H1 Ebit before exceptional items of £57.1 million (€65.4m) against a loss of £7.2 million in the year-ago period. European market revenues increased by 27 percent to £1,152.5 million (€1.32bn) from £908.0 million. Part of the continent’s improved H1 performance was attributed to additional investments in logistics, with 90 percent of store merchandise now coming from warehouses in southern Belgium and northern France. JD continues to expand its retail presence in the market, where 51 doors were added in H1, including nine new stores in Eastern Europe and the conversion of 22 former Chausport stores in France. Additionally, the group will shortly open its first store in Greece and is managing a joint venture in Israel, where two locations will grow to five in H2. In the home U.K. / Republic of Ireland market, H1 revenues increased 19.8 percent to £1,748.0 million (€2.06bn) and Ebit before exceptional items came in at £153.0 million (€175.0m) versus £174.2 million.
First-half North American revenues, impacted by supply chain problems in the first quarter and a difficult year-over-year comparison – because of a federal fiscal stimulus to consumers in 2021 – declined by 4.2 percent to £1,300.4 million (€1.49bn). The region’s Ebit before exceptional items of £130.4 million (€149.2m) was lower than the year-ago’s £245.5 million but in line with expectations. The group ended the period with 107 JD banners in North America, up from 66 a year ago; this included six in Canada. A second flagship store will be opened later this fall on State Street in Chicago.
Elsewhere, in Asia-Pacific, H1 Ebit before exceptional items rose 115 percent to £29.3 million (€33.5m) from £13.6 million. The group, which added three doors in Australia to end the period with 43 locations in that market, is looking to expand into New Zealand. Also, four stores have been opened in Indonesia, with joint-venture partner PT Erajaya Swasembada Tb.
JD’s outdoor segment reported a 16.8 percent increase in H1 revenues to £274.7 million (€314.3m) on Ebit of £4.0 million (€4.6m) versus £10.8 million in the year-ago period. Category sales in H1 were led by 16.9 percent growth for apparel to £1,533.1 million (€1.75bn), a 6.3 percent gain for footwear to £2,397.3 million (€2.74bn) and a 52 percent increase in sales of accessories to £270.0 million (€308.9m). Through the first six weeks of H2, JD said organic retail sales were up 8 percent year-over-year.
