Pro Content
JD Sports Q425 Trading Update & FY26 Guidance
JD Sports Fashion has announced its fourth quarter trading update for the 13 weeks to 1 February 2025 (the ‘period’/’Q425’) and initial guidance for the new financial year (‘FY26’).
Highlights · FY25:
Organic revenue growth of 5.8% and Profit before tax and adjusting items in line with January 2025 guidance range of £915-935m ·
FY26: Trading to the end of March has been in line with expectations; while they currently expect Profit before tax and adjusting items to be in line with consensus expectations , their FY26 guidance excludes any potential impact from changes to tariffs ·
Q425 trading update
In a challenging market, Q425 LFL revenue growth was 0.3% with organic revenue growth of 5.6%, driven by a strong performance in Europe. For the full year, LFL revenue growth was also 0.3%, in line with previous guidance of broadly flat, with organic growth of 5.8%, slightly ahead of their previous guidance and driven by strong growth from North America, Europe and Asia Pacific. JD’s recent acquisitions, Hibbett and Courir, traded in line with expectations in the period. Gross margin for the year was 47.8%, 20 basis points below the previous year due to the impact of the acquisitions. The total number of stores at the year end was 4,850, up 1,533 from the start of the year, including 1,485 stores acquired through Hibbett and Courir. As a result we expect Profit before tax and adjusting items for the 52 weeks to 1 February 2025 to be in line with their January guidance range of £915-935m.
FY26 guidance
JD expect the trading environment in key markets to be volatile throughout the year and have started the year in line with their expectations. They have noted the proposed changes to tariffs announced last week. At this stage, the outcome of these developments is uncertain. JD are in regular dialogue with brand partners but it is too early to comment on the potential sector impact. Total revenue in FY26 will grow due to the impact of the acquisitions made during FY25, which will add c.10% in FY26, and through the contribution from new space of c.4%. They anticipate c.150 new stores and c.100 conversions/relocations in the year. There will also be c.50 closures, mainly in Eastern Europe. JD anticipate LFL revenues will be below FY25. They have additional operating expenses in the year, outside of normal inflationary increases, including UK labour costs and a higher proportion of IT investment falling into operating expenditure as opposed to capital expenditure. Offsetting these increases partially will be cost savings and scale efficiencies across their key markets, and integration synergies in North America following the Hibbett acquisition. Accordingly, while they expect FY26 Profit before tax and adjusting items to be in line with current consensus expectations , their FY26 guidance excludes any potential impact from changes to tariffs. Capital expenditure will be c.£500m.
Régis Schultz, CEO of JD Sports Fashion Plc, said: “JD operates within an attractive, long-term growth market and we are well positioned to continue growing market share. We have strong brand partner relationships and an agile, multi-brand model which allows us to drive, and respond quickly to, market trends. We are highly cash generative and disciplined in terms of our capital allocation opportunities. “We have made significant strategic progress over the last two years: we have accelerated the growth of the JD brand, particularly in North America and Europe; we have continued building a global sports fashion powerhouse through the acquisitions of Hibbett and Courir, taking full ownership of ISRG in Iberia and MIG in Eastern Europe, and disposing of around 30 non-core businesses; we have upgraded our global supply chain; and we have built the required infrastructure and governance for a group of our scale. “Reflecting slower market growth and the investments we have made in our supply chain and infrastructure, we are updating our medium-term plans to capitalise on our organic growth opportunities in North America and Europe, deliver productivity and efficiency benefits from the investments and utilise our strong cash generation to deliver improved returns for our shareholders.”