The company is also expected to confirm that profits have dipped slightly over the year to early February, in an update to shareholders on Thursday March 28
JD Sports is expected to announce a growth in sales, despite concerns from investors about the company’s future.
The sports retailer is likely to confirm a slight dip in profits for the year up to early February when it updates shareholders on Thursday, March 28. Over the past year, the company’s shares have fallen by around a third due to a tough economic environment.
Investors are hoping for a more positive outlook after JD Sports lowered its profit targets in January. The company had previously told the market that it was on track to make a pre-tax profit of between £915 million and £935 million for the year to early February, down from an earlier prediction of £1.04 billion.
This latest forecast suggests a drop in profits, following a pre-tax profit of £991 million the previous financial year. JD’s shares fell by over a fifth after this downgrade, which the company blamed on weaker-than-expected trade over Christmas and increased promotions to boost sales.
Despite this, the company is still expected to report a rise in sales, although there may be a noticeable slowdown towards the end of the year. “On a statutory basis, analysts are looking for 4% growth to a record £10.5 billion,” says AJ Bell’s Danni Hewson.
“However, there will be more interest in the like-for-like growth figure, which Mr Schultz quantified at 8% year-on-year in the first half, and just 1.6% in the 22 weeks to 30 December, with the peak Christmas season softer still.”
Shareholders in the company will be hoping this growth rate increases again in the coming weeks. This is due to the expected success of JD’s store expansion plan. Despite this, investors may feel a bit wary after Nike, a key JD supplier, said sales over the first half of the next financial year are expected to fall.
Investec analyst Kate Calvert said: “JD not only has tough comparatives in the first half of 2024/25 but it is clear from Nike’s Q3 comments that there are likely to be lower levels of key Nike stock lines in calendar 2024 as Nike reins in key legacy franchises.
“We believe the Air Force One Lifestyle franchise is a particularly important one to JD. The question is whether Adidas and other brands can sufficiently fill Nike’s innovation and volume headwind to maintain reasonable sales momentum in full-year 2024/25.”
