For the 22 weeks ending on 30 December 2023, JD Sports Fashion Plc, the prominent sports, fashion, and outdoor brand retailer, released its peak season trading update. The constant currency organic revenue growth for this period reached 6%, with like-for-like growth at 1.8%, slightly below initial expectations. The apparel segment's revenue growth was affected by milder weather since the second half of September, and the overall peak trading season proved softer and more promotional than anticipated, reflecting a trend of cautious consumer spending. The company now projects full-year organic revenue growth to be approximately 8%.
Despite the challenges, the gross margin rate for the period is consistent with the previous year. However, it falls short of expectations due to heightened promotional activity during the peak trading period. Consequently, the full-year gross margin rate is expected to be slightly lower than last year. The FY24 performance will also be influenced by the reclassification of specific capital expenditures into operating expenses, amounting to £7m, a decrease in interest income by £8m following the ISRG NCI acquisition, and additional dual running infrastructure costs, as previously disclosed.
As a result, the estimated profit before tax and adjusted items for the full year ending 3 February 2024, is now projected to be in the range of £915m to £935m.
JD Sports Fashion Plc has expressed confidence in its inventory position as the year-end approaches. The full-year results will be released in a timeframe similar to the previous year, as the company collaborates with new auditors. Prior to the full-year results, a comprehensive trading outcome update, including initial guidance for FY25, is scheduled for release in March.
Régis Schultz, CEO of JD Sports Fashion Plc, said: "We have made good progress against our five-year strategic plan, delivering global organic revenue growth of 6% in the period, against very tough comparisons with last year, and opening over 200 new JD stores in the year. Our key markets have seen increased promotional activity during the peak trading season, driven by a more cautious consumer, but we continue to grow market share. We are confident in our strategy and we continue to invest in our supply chain, systems and stores, supported by our strong cash generation and healthy balance sheet."
