JD Sports Fashion (LSE:JD.) maintained its full-year profit guidance after reporting profit before tax and adjusting items of £282 million for the 26 weeks ended 1 August, compared with an analyst consensus estimate of £279 million.
Revenue declined to £5.90 billion from £5.94 billion in the prior-year period, in line with expectations.
Like-for-like sales fell 2.8%, while organic sales declined 0.7%. The company cited promotional activity and conditions in the footwear product cycle among the factors affecting trading.
JD maintained its full-year guidance for profit before tax and adjusting items of between £700 million and £800 million. Its free cash flow forecast was also unchanged at £460 million to £520 million.
Gross Margin Falls 20 Basis Points to 46.8%
JD reported a gross margin of 46.8%, down 20 basis points from the previous year.
Analysts had expected a decline of approximately 50 basis points.
The company said its underlying gross margin declined by around 50 basis points, largely reflecting price investments, particularly in online channels. Higher marketing contributions partly offset the reduction.
North America Organic Sales Decline 1.7%
North America, JD’s largest regional market and 38% of group sales, recorded a 1.7% decline in organic sales.
The company said promotional activity and the footwear product cycle affected performance in the region, with trading weakening during the second quarter. Product availability also affected sales.
Europe, which accounted for 33% of group sales, recorded a 0.5% decline in organic sales.
Asia Pacific reported organic sales growth of 10.7% and represented 5% of group sales.
JD Sports Moves to Net Cash Position
JD reported net cash before lease liabilities of £168 million at the end of the first half, compared with net debt of £125 million a year earlier.
The retailer declared an interim dividend of 0.40 pence per share, an increase of 21% from the previous year.
JD also began the second £100 million tranche of its £200 million share buyback programme on 3 August.
Chief executive Régis Schultz said the company remained focused on executing its strategy while managing the current trading environment.
Leave a Reply