Sportswear retailer JD Sports Fashion reports sales in line with expectations, as previously presented for the first half, while profit before tax and adjusting items was slightly better than expected.
Sales amounted to GBP 5,899 million (5,940), which was as expected according to the company’s analyst consensus of GBP 5,899 million. Organic sales decreased 0.7 percent, also as expected. Like-for-like sales, LFL, decreased 2.8 percent, in line with consensus.
Gross margin amounted to 46.8 percent (47.0), corresponding to a decline of 20 basis points. Consensus expected a decline of 50 basis points.
Operating profit before adjusting items and after interest on lease liabilities was GBP 294 million (369), with an operating margin of 5.0 percent (6.2).
Profit before tax and adjusting items amounted to GBP 282 million (351), versus the expected GBP 279 million. The outcome was therefore slightly better than expected.
Adjusted earnings per share amounted to 3.97 pence (4.60). Free cash flow amounted to GBP -18 million (-68). The board proposes an interim dividend of 0.40 pence per share (0.33).
CEO Régis Schultz says that the half-year was characterised by pressure on consumers, headwinds from the product cycle in footwear and a heavily promotion-driven market. At the same time, he highlights growth in clothing and accessories as well as continued development in running and newer footwear models.
JD Sports reiterates its full-year guidance for profit before tax and adjusting items of GBP 700-800 million and free cash flow of GBP 460-520 million. At the same time, the company lowers its guidance for gross investments to GBP 350-400 million, from approximately GBP 400 million previously. The medium-term financial priorities remain unchanged.
