Jd Sports falls on the London Stock Exchange after a difficult half year

(Il Sole 24 Ore Radiocor) - A decidedly negative reception on the London Stock Exchange for Jd Sports Fashion's annual results and the first indications for the new financial year. The clothing and sporting goods chain's share price was down more than 6 per cent. In the 53 weeks to 3 February, Jd Sports had sales of GBP 10.42 billion, compared to GBP 10.13 billion in the 52 weeks to 28 January 2023. Operating profit amounted to 927 million (+15 per cent) and pre-tax profit jumped to 811 million from 486 million. Excluding extraordinary items, however, operating profit dropped 8.1% to EUR 979m and gross profit fell 8% to EUR 917m. Net cash also fell to EUR 1,032 million from EUR 1,469 million.

Jd Sports notes that revenues were held back in the second half of the year by abnormally mild weather, which affected the sale of winter clothing and accessories. The company also explained that the drop in gross margin to 47.9 per cent from 48.2 per cent was related to 'high promotional activity during the peak period'. The proposed final dividend amounts to 0.6 pence per share and brings the total coupon for the year to 0.9 pence against 0.8 pence in the previous year. "We did better than the industry average in a difficult and volatile market," commented CEO Regis Schultz, adding that "the first quarter of the new financial year is in line with expectations in a volatile market."

The group is nevertheless on track to achieve full-year guidance, the CEO added. The presentation slides, on the other hand, showed that on a comparable basis, the group's quarterly sales were down 0.7 per cent and margin was down from last year. For analysts at Peel Hunt, Jd Sports had a difficult second half of the year ending February, considering that despite a good start to the year, profit before tax and adjusted items for the year fell 7.5%. According to analysts, the past six months have been difficult due to weak product innovation, unfavourable weather, and high balances. As for the first figures for the initial quarter of the fiscal year 2025, experts say that 'the current sales trend is not exciting, but is in line'.