JD Sports Fashion announced its financial targets for fiscal 2025, emphasizing its commitment despite experiencing a decline in attributable profit compared to the previous year. The company, a leader in the sports, fashion, and outdoor retail sectors, revealed on Wednesday that it continues to anticipate a profit before tax and adjusting items ranging from £955 million to £1.04 billion, contingent upon exchange rates.
Additionally, JD Sports expects nearly a £25 million contribution from Hibbett, a sporting goods company it acquired in July for $1.08 billion. Analysts at Bernstein have characterized JD Sports’ pre-tax profit forecast as conservative, particularly noting the strong margin performance in the first half of the year and the positive impact from Hibbett.
They predict that consensus estimates will gradually align upwards as the results become clearer post-reporting. For the six months ending August 3, the London-listed company reported an attributable profit of £52.2 million, a stark decrease from £257.5 million during the same period last year. This significant downturn was attributed to a rise in adjusting items, which encompassed a net charge of £279.3 million due to impairment of both tangible and intangible assets, acquisition-related expenses, losses from the divestment of company assets, and amortization of acquired intangibles.
In contrast, revenue surged to £5.03 billion, an increase from £4.78 billion, propelled by organic sales growth of 6.4% year over year. JD Sports experienced double-digit organic growth across various regions, including Europe, North America, and Asia Pacific, growing its global presence to 4,506 stores during this period.
Analysts at RBC Capital Markets noted that the results suggest JD Sports’ multi-brand strategy is effectively countering weaknesses at Nike, demonstrating unexpectedly strong margins in the US and Europe. This resilience should bolster investor confidence in JD Sports achieving its fiscal year 2025 profit before tax guidance.
The increase in revenue also prompted the JD Sports board to recommend a 10% rise in its interim dividend, raising it to £0.0033 per share from last year's £0.0030. Despite these positive indicators, the company's stock saw a decline of nearly 4% during morning trade..