JD Sports H1 revenue tops £4.4bn; shares fall on caution

Shares of Bury-based FTSE 100 retailer JD Sports Fashion Plc fell as much as 8% on Thursday after it published results for the 26 weeks ended July 30, 2022, showing an 18% fall in pre-tax profits to £298 million and saying it remains “cautious about trading” for the remainder of the second half of the year.

Nonetheless, first-half revenue rose about 14% to £4.42 billion.

The company said the first half results were at the top end of the board’s expectations with profit before tax and exceptional items of £383.5 million (2021: £439.5 million).

JD Sports Fashion is maintaining its view that headline profit before tax and exceptional items for the year ending January 28, 2023, will be in line with the record performance for the year ended January 29, 2022.

In his outlook, JD Sports chair Andrew Higginson said: “We continue to be reassured by the ongoing resilience in the group’s performance with trade to date through the second half following a similar trend to the first half with total sales in the group’s organic retail businesses tracking around 8% ahead of the prior year after six weeks.

“This includes an encouraging return to positive trading in the United States.

“Trade in the UK, principally online, initially softened in August and early September with customers understandably slower to transition into heavier weight Autumn product whilst the weather remained relatively warm and dry.

“However, the performance has improved again in the most recent weeks.

The group also continues to take necessary action to mitigate the current cost pressures with ongoing initiatives including maximising productive hours in stores and our warehouse facilities, improving energy efficiency at all our sites and delivering savings on consumable items.

Whilst the overall performance continues to be encouraging and the result for the half year was at the upper end of the board’s expectations, it must also be recognised that the most material trading periods lie ahead.

“Given the widespread macro-economic uncertainty, inflationary pressures and the potential for further disruption to the supply chain with industrial action a continuing risk in many markets, it is inevitable that we remain cautious about trading through the remainder of the second half.

“Despite this, the board maintains its view, at this point, that the headline profit before tax and exceptional items for the year end 28 January 2023 will be in line with the record performance for the year ended 29 January 2022.”

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