For the 14 weeks to 7 May, JD Sports said total sales in its like for like businesses were 5% higher than the same period in the prior year.
The note from JD Sports came ahead of the group’s full-year trading announcement next month.
“This performance is a positive reflection of both the strength and breadth of the Group’s brand relationships and category offer. It has also been achieved against a backdrop of a global shortfall in the supply of certain key footwear styles which we expect to improve progressively through the year,” the group said in a note to the London Stock Exchange.
“Whilst we are pleased with the trading to date, which is at least in line with the group’s expectations, we remain conscious of the headwinds that prevail at this time including the general global macro-economic and geopolitical situation.”
The board still believes that the headline profit before tax and exceptional items for the year-end 28 January 2023 will at least be equal to that for the year ended 29 January 2022 which, after finalising certain year-end accounting positions including the calculation of leases under IFRS16, is now expected to be approximately GBP940m (US$1.15m).
In February, JD Sports and Footasylum were fined almost GBP5m (US$6.8m) by the UK Competition & Markets Authority after the watchdog said rules around a merger it had previously blocked were breached.
Commenting on the announcement, Darcey Jupp, apparel analyst at GlobalData says the sales growth, albeit “subdued” still represents strong growth for JD Sports in what is becoming an increasingly uncomfortable year for many retailers.
“JD Sports Group proved itself to be an imitable force during the pandemic, perfectly capturing the increased demand for sportswear and outdoorwear through its diversified and global offer, and it is in a strong position to capitalise on the sustained demand for sportswear. Yet with inflation spiralling in its core UK and US markets, the group must be cautious as it approaches even tougher trading conditions in the months ahead,” she says.
GlobalData’s April monthly survey revealed that 50.9% of UK consumers believe their financial position will get worse in the next six months, and 45.2% intend to either buy fewer clothing and footwear products or stop buying them altogether.
“This poses a significant threat to its eponymous retailer, with inflation disproportionately affecting the young and lower-income consumers who form JD Sports’ core shopper base. To weather the storm, the retailer must retain its exclusive products and competitive pricing to ensure it remains the first choice for consumers looking to purchase sportswear. With no indication that its wholesale agreements with Nike and Adidas are at risk as they push towards direct-to-consumer models, JD Sports is well-positioned to thrive,” says Jupp.