We have written this before, but Bury-based JD Sports believes its elusive billion pound profit target could be achieved this year.
Despite the “volatility” of the global economy, the sports fashion operation said it was still on course for a £955 – £1.035bn profit for the year end.
In this morning’s trading update, it stated that it had delivered an 8.3% organic sales growth and 2.4% like-for-like sales growth during the second quarter of the year (to August 3rd).
The date is particularly consequential this year, because it completed the $1.1bn acquisition of New York-listed, Hibbett on July 25th.
“[…] we saw double-digit organic sales growth in North America and Europe, supported by the continued success of our JD store rollout programme,” said Régis Schultz, CEO of JD Sports Fashion Plc.
“We completed the acquisition of Hibbett, Inc. just before the period end and we look forward to its contribution to the growth and development of our US business in the coming years. Based on our first-half trading, we remain on track to deliver profit within our full-year guidance.”
Breaking down by region, JD’s like for like growth was strongest in North America (+5.7%), followed by Europe (+3.0%) It said the UK “improved materially” quarter on quarter.
In a statement the group added:
“While the overall market remains volatile, we showed good promotional discipline and managed inventory proactively to support gross margins in the period.”
Gross margin for the Group in the period was 48.4%, which is down from last year – this is mainly across apparel and online.
It concluded:
“The global macro environment remains volatile and so we continue to be cautious on our outlook for the rest of the year. Notwithstanding this, based on our first half trading and allowing for an anticipated c.£15m headwind at current exchange rates due to a stronger pound, we are maintaining our guidance range of profit before tax and adjusting items of £955m to £1,035m, on a pre-Hibbett basis.”
It explained that sales from Hibbett will be excluded from like-for-like and organic sales figures for the first 12 months following acquisition.
