21 September 2023
If you are covering JD Sports’ latest financial results, please find below a comment from Mamta Valechha, equity research analyst at Quilter Cheviot:
“JD Sports appears to weathering the economic challenges that have gathered apace in the last year, with its first half results in line with market expectations. Supply chain issues also seem to have been resolved, with JD Sports benefiting from better product availability, which in turn has driven organic sales up by 12%.
“While the standout performance came from Europe, which was up +27%, the key focus on today’s results will be North America, where the market has been quite nervous following profit warnings from Foot Locker and Dick’s Sporting Goods. JD Sports, however, is in a different ballpark to these peers and it produced solid results in the face of a weakening consumer. Sales were up 15%, and this is a great vindication of its strategy and signals the relative strength of its product offerings versus peers.
“Meanwhile the UK is holding up well too, with organic sales +8%. Profits were down as a result of investments into distributions centres and head office costs, however, these should ease off going into the second half.
“JD Sports is also making hay, with strong trading in the current environment. The US business is benefiting from a strong back to school season, with revenues rebounding in July and August and September growing nicely up double digit.
“JD Brand First strategy also remains on track with over 200 new JD stores due to open in the current financial year. Its new European distribution centre is on track and JD plans to launch a new loyalty card in the UK in October, and which will rolled out next year in Europe. Ultimately, it remains a very strong business despite the challenges facing consumers and with the valuation remaining undemanding it continues to offer investors good value.”
