Britain’s JD Sports, coming out of a financial year where Ebit declined by 33 percent to £440.9 million (€507.6m) from £654.7 million due to exits from branded fashion businesses and the cost of shuttering its South Korea operations at a total expense of £550.5 million, is aiming to hit the average consensus estimate of £1.03 billion in profit before tax and adjusted items in FY24 ending in Jan. 2024.
The group, which welcomed CEO Régis Schultz in February, generated 18 percent revenue growth to £10,125.0 million (€11.76b) from £8,563.0 million for the 52 weeks ended Jan. 28. Annual gross margin declined by 130 basis points to 47.8 percent from 49.1 percent. Organic sales at constant exchange rates were up 12 percent year-over-year, with H2 strength in North America as the supply chain woes of key suppliers eased.
Key JD objectives for the next five years include annual cash generation from operating activities of £1 billion annually, double-digit market share in key regions, a double-digit operating margin, and double-digit revenue growth annually on average.
The Sports Fashion segment, according to the unaudited FY23 results, realized a 25 percent drop in annual operating income to £532.8 million (€613.4m) despite 18.8 percent revenue growth to £9,560.6 million (€11.0b). Profit before tax and adjusted items fell 1.4 percent to £977.4 million. JD said it was pleased with the recovery in its premium sports fashion businesses in Europe last year, where profit before tax and adjusted items hit £92.6 million versus £29.2 million in the prior year.
The Outdoor segment reported a £23.0 million (€26.5m) operating loss as revenues increased by 9.9 percent for the FY to £564.4 million (€649.8m).
On the store front, the group ended the year with 138 JD-bannered doors in North America and 58 new ones across Europe, including the first stores in Hungary, Lithuania, and Greece. Meanwhile, JD is moving forward with the planned acquisition of Courir, which has 313 stores across six European countries and is focused on female customers. The deal is expected to close later this year. Already, JD has acquired nine Gap stores in France that will be converted to its banner and format.
Meanwhile, new ownership developments will likely surface in the coming months for the Iberian Sports Retail Group, S.L., which is currently 49.98 percent owned by minority parties. JD may acquire 100-percent ownership or sell its 50.02 percent stake in the business, which would result in the divestiture of the Sprinter, Sport Zone, Deporvillage, and Bodytone banners in Iberia and the Sprinter, Aktiesport, and Perry Sport businesses in the Netherlands.
