JD Sports is projecting profit before tax and adjusted items for the year ending Feb. 3, 2024 to be in the range of 1.03 billion pounds ($1.28 billion).
In a Nutshell: “Whilst we are encouraged by the resilient nature of the consumer demand in the current period to date, we remain conscious of the headwinds that prevail at this time including the general global macro-economic and geopolitical situation,” JD Sports chairman Andrew Higginson said on Wednesday. “Against this backdrop, assuming current exchange rates, we expect that the Group’s headline profit before tax and adjusted items for the 53 week period ending [Feb. 3,] 2024 will be in line with the current average consensus expectations of 1.03 billion pounds ($1.28 billion).”
Higginson said JD “continues to be the partner of choice for many international brands” that see its retail banners as the “natural global home” for their products.
Régis Schultz, who was named CEO last September, said the company opened 138 doors for the year in North America, including 10 stores in Canada, versus 89 locations in the prior year. The 41 new U.S. stores for the JD banner includes 24 former Finish Line locations.
Schultz said the company will open an additional 500 to 600 JD stores over the next five years in North America, with the stores either new doors or converted standalone Finish Line stores. At the end of the fiscal year, the company still operated 392 Finish Line locations.
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“The Shoe Palace and DTLR businesses also continue to make progress in their markets with seven new Shoe Palace stores and a net two new DTLR stores opened in the period,” Schultz said. He added that JD plans to keep the Finish Line name as a concession in the Macy’s department stores, with an assortment focused on families. Finish Line has 289 concessions in Macy’s.
With the U.K. and Republic of Ireland representing the “most mature market” for its core JD and Size ? banners at 444 doors, Schultz said other parts of Europe represent a long-term growth opportunity for the region. Fifty-eight new JD stores opened in the reporting period. The company is in exclusive talks to acquire the Courir business in Europe. Based in Paris, the business has 313 stores across six countries in Europe.
Schultz headed up the review of JD’s banners as it looked to future growth opportunities that led to the offloading of 15 brands to Frasers.
Net Sales: Revenue for the year ended Jan. 28 rose 18.2 percent to 10.13 billion pounds ($12.56 billion) from 8.563 billion pounds ($10.62 billion).
Earnings: Profit before tax and adjusted items rose 4.7 percent to 991.4 million pounds ($1.23 billion) from 947.2 million pounds ($1.18 billion).
The company said profits before tax fell 32.7 percent to 440.9 million pounds ($547.0 million) from 654.7 million pounds ($812.3 million). Both periods include a one-time charge for certain items of 550.5 million pounds ($683.0 million) and 292.5 million pounds ($362.9 million), respectively, which pulled down JD’s statutory pre-tax profits in both periods.
CEO’s Take: “I have now completed a full review of our organisational structure with clear principles of responsibility and well defined spans of control to help lay the foundation for our future success,” Schultz said. “We are also supporting our global business units through the creation of centres of excellence which will have specific measurable KPIs (key performance indicators) that are closely aligned to our business priorities.”