JD Sports is celebrated its wins on Wednesday as the UK-based athletic retailer reported record interim results for the first half of fiscal 2025.
According to the company, it delivered revenue of 5 billion pounds in the first half, a 5.2 percent increase from 4.8 billion pounds in the first half of fiscal 2024. Net profit before tax and adjusted items was 405.6 million pounds in the period, up 2 percent from 397.8 million pounds the same time last year.
When it comes to North America, now its largest market following the recent acquisition of Hibbett, revenue grew 14.5 percent to 1.2 billion pounds in the first half of the year. The company said that its organic sales growth in North America was 13.2 percent in the period, reflecting the growing presence of the JD brand with 275 JD stores open at the end of the period in North America, compared with 175 just 12 months’ prior.
“With an annual turnover around 11.7 billion pounds, equivalent to more than $15 billion and 4,500 stores in the world, JD Group lead the global stores fashion retail industry,” JD Sports chief executive officer Régis Schultz told analysts on the company’s earnings call on Wednesday. “We have positioned ourselves for ambitious growth with our double-digit revenue growth, double-digit operating margin and double-digit market share in key regions. Those ambitious objectives are not new, but they are more relevant than ever as we continue to drive forward.”
“JD revenue growth is more than double the industry average,” he added. “Where many peers have struggled to maintain single-digit growth, we are consistently delivering strong double-digit growth, particularly in key region like North America and Europe. More importantly, JD store productivity is about 50 percent higher than our competitors.”
Here are some takeaways from the company’s earnings call on Wednesday.
Finish Line’s Conversion Plan
Following an analyst question as to whether the Finish Line banner will disappear as the company continues to convert existing Finish Line stores to the JD banner, also known as a “badge flipping,” Schultz confirmed the company’s plan. “We are looking at the plan for [Finish Line],” Schultz said. “In three years’ time, we will have moved all Finish Line stores to JD.”
But, it’s not the end of Finish Line. In a statement sent to FN, a JD Sports representative confirmed that while all standalone Finish Line stores in malls across the country will eventually convert to JD locations over the next several years, Finish Line stores inside Macy’s will continue to operate going forward. “The Finish Line brand allows us to extend our reach to a unique consumer base and the brand continues to be strong with high levels of awareness and demand,” the company rep stated.
The CEO added that as of now, JD has been focused on converting stores with high sales volume first, but will move on to accessing smaller stores. In the first half of fiscal 2025, the company has converted 13 Finish Line stores to the JD fascia and opened a further 24 new JD stores across the US and Canada. New locations for the JD brand in the region included the Bakers Centre in Philadelphia and the Mayfair Shopping Centre, in Victoria, British Columbia.
“We have continued to invest in growing the JD fascia across our key markets, while reducing the number of non-JD stores, as we pursue our JD First strategy,” Schultz said. “We opened the period with 1,902 stores, of which 1,254 were the JD fascia (66 percent), and we ended the period with 1,951 stores, of which 1,340 were the JD fascia (69 percent).”
JD Sports acquired Finish Line in 2018 in a $558 million deal. Schultz noted that at the time of acquisition, Finish Line had revenue of 1 billion pounds and was “losing money.” By 2023, sales in the U.S. reached 3.1 billion pounds, an increase of more than 1 billion pounds when adding in other U.S. retail acquisitions, the CEO added. “These achievements reflects our ability to scale rapidly while expanding our presence and making, at the same time, JD, our No. 1 fascia across North America,” he said.
JD CEO Positive on Changes at Nike
Following last month’s news that Nike will replace CEO John Donahoe with veteran employee Elliott Hill, analysts were eager to get JD’s take on the move. “I think that we see some good things happening. I think that Elliott will bring energy in the business and focus on product and innovation and wholesale partners. So I think we’re quite positive on that,” Schultz said.
Schultz also noted that JD’s business is still healthy even without a renewed energy at Nike. “We are in an industry which is a growing industry,” he added. “So consumers want new product, and if they don’t find it from Nike, they will find it from other brands. Our agility to move and agility to pick up trends and to be the first one to pick up those trends has been demonstrated time after time, and I think that we will continue to see that happening.”
This sentiment follows JD’s announcement in August that it has expanded its relationship with Nike by offering the Nike Connected Membership program to its U.S. customers. The move made JD the sportswear giant’s first global partner for the popular loyalty rewards program after successfully launching in the UK in 2022, the company said at the time.
Footwear Is Still Winning
Footwear has continued to trade better than apparel, although both categories grew in the period, Schultz said on Wednesday. “Footwear in the lifestyle space is a resilient, growth category driven by the continued growth in sneakers around the world,” he said. “Growth in the period was 9.6 percent and footwear’s share of our revenue increased 2.4 percent to 59.8 percent.”
The CEO also pointed to the climate in the U.S. as another reason why apparel doesn’t overtake shoes as the top category.
“Apparel penetration in U.S. would be always lower because in [the states] because you have a significant part of the country where the weather is hotter than the one we have in U.K.,” Schultz said.