JD Sports Q2 trading update shows 8.3% organic sales growth despite boardroom turbulence

JD Sports‘ Q2 trading update, published on Thursday 22 August, reveals the sportswear retailer achieved 8.3% organic sales growth and 2.4% like-for-like sales growth in the 13 weeks to 3 August 2024, according to the JD Sports Q225 Trading Update. The figures arrive at a moment when the group is under scrutiny from shareholders over its leadership and longer-term strategy.

Like-for-like growth measures sales from stores that have been open for at least a year, stripping out the effect of new openings, so a positive reading here signals that existing shops are genuinely pulling in more customers, not just that the estate is getting bigger. Organic growth covers the wider business before the effect of acquisitions is counted in.

JD Sports Q2 trading update: what the numbers show

The period in question covered the 13 weeks to 3 August 2024. The JD Sports Q225 Trading Update also confirms that the company completed the acquisition of Hibbett, Inc. just before the period end, a deal that will add to the group’s footprint in North America and is expected to feed into future revenue figures once integrated.

One standout detail from the quarter was the performance of licensed products. According to IG International, sales of licensed products grew 35% compared with the previous European football tournament, with the retailer selling nearly as many Scotland jerseys as England kits during the 2024 European championship. That is a picture of breadth across the UK market rather than reliance on a single national team’s success.

The trading update was presented by chief executive Regis Schultz, who took the role in 2022. Shares in the company declined by around 15% under his leadership over that period, although they have risen almost 10% since the start of the year.

Boardroom pressure and the path ahead

The backdrop to this update has been unusually turbulent. Earlier this year, the group’s previous chairman Andy Higginson reportedly approached board members pushing for the chief executive to be replaced, amid a disagreement over the firm’s trajectory. Mr Higginson ultimately resigned in April, and the group has since replaced him with former Ikea boss Peter Agnefjall.

It is understood that Mr Schultz has the support of JD Sports’ majority owner, the Rubin family’s Pentland Group retail vehicle. Even so, this year is being treated as a critical test of whether the current strategy can win back broader shareholder confidence.

Bosses have already indicated that pre-tax profits are likely to fall from the £852 million recorded last year, guiding towards a range of between £750 million and £850 million. Investors will be watching closely to see whether the group narrows that guidance range or points to any improvement in the outlook.

The wider market has not made life easy. Softness in global sportswear and apparel has weighed on the group, with pressure from geopolitical instability, supply chain disruption and cautious consumer spending. Analysts at Investec indicated they expect JD Sports’ revenues for the latest quarter to have “slowed” as a result.

Key suppliers have also flagged difficulty. Nike, one of JD Sports’ largest brand partners, has pointed to declining revenues of its own in recent months, which analysts have noted as a headwind for large-format sportswear retailers.

Richard Hunter, head of markets at Interactive Investor, pointed to specific consumer pressures: “JD has no direct exposure in the Middle East but second-round effects such as the inflationary impact need to be monitored. Lower-income shoppers could be under pressure due to rising energy costs and any cost-of-living demands on individual budgets, particularly in its core younger market.”

The completed Hibbett acquisition and the strong licensed-product performance during Euro 2024 give the group two concrete threads to pull on as it makes its case to investors. Whether the full-year profit guidance tightens in a more favourable direction will be the next test, when JD Sports reports its half-year results later in the year.