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Sandra Halliday Published
April 9, 2025
JD Sports Fashion had plenty of news Wednesday beyond its trading update with the retail giant also outlining its medium-term strategy and warning of volatile trading.
In an interview, its chairman Andrew Higginson also criticised the uncertainty created by President Trump's trade war and said that prices could rise. But he ruled out moving production to the US.
Speaking to the BBC, he said producing goods in many of the key countries where items such as trainers are made isn't just about cheap labour but about the expertise and investment that's gone into the technology and manufacturing capabilities.
The numbers
So, let’s look at what happened in FY25 and specifically in JD’s fourth quarter.
Without giving many monetary values ahead of its final full-year results announcement, the company said organic revenue growth was 5.8% in FY25, slightly ahead of previous guidance with strong growth from North America, Europe and Asia Pacific.
Profit before tax and adjusting items was “in line with” the January guidance of £915 million to £935 million.
Trading in the two months to the end of March — the start of FY26 — has met expectations. But while FY26 profit guidance should also match analysts’ expectations, it “excludes any potential impact from changes to tariffs”. So that’s a big potential dark cloud hanging over the business.
The Q4 trading update part of the announcement — for the 13 weeks to 1 February — said that “in a challenging market, Q425 [like-for-like/LFL] revenue growth was 0.3% with organic revenue growth of 5.6%, driven by a strong performance in Europe”. For the full year, LFL revenue growth was also 0.3%, in line with its previous guidance of “broadly flat”.
Looking at Q4 revenue in more detail, on an LFL basis in the UK it was down 1.2% but it rose 0.8% organic. It was up 3.5% LFL and 11.4% organic in Europe and down 1.5% LFL but up 3.9% organic in North America. In Asia Pacific it was up 2.2% and 11.4%.
For the full year, the UK was down 2.5% LFL and 0.7% organic while Europe rose 2.7% and 10.5%, respectively. North America was up 0.8% and 7.5%, while Asia-Pacific was down 0.1% LFL but up 9.5% organic.
It said its recent acquisitions, Hibbett (in the US) and Courir (in France), traded “in line with our expectations in the period”.
Gross margin for the year was 47.8%, 20 basis points below the previous year due to the impact from the acquisitions.
Looking ahead
The company believes the trading environment in key markets will be volatile this year but can’t yet say just how volatile.
Its total revenue will grow, both due to the acquisitions made in FY25 (which will add around 10%), and the contribution from brand new space of around 4%. That said, LFL revenues are predicted to fall compared to FY25.
The company also talked of higher costs during this financial year linked to things like a higher proportion of IT investment falling into operating expenditure as opposed to capital expenditure and higher UK National Insurance contributions. Partially offsetting these increases will be cost savings, scale efficiencies and integration synergies in North America following the Hibbett acquisition.
As for the firm’s update about its medium-term strategy, there was little to surprise anyone there, although it’s reducing investment, consolidating its position in key markets and prioritising shareholder returns.
CEO Régis Schultz said it operates in an attractive, long-term growth market and is well positioned to continue growing market share, with strong brand relationships and an agile, multi-brand model.
He added that “we have made significant strategic progress over the last two years: we have accelerated the growth of the JD brand, particularly in North America and Europe; we have continued building a global sports fashion powerhouse through the acquisitions of Hibbett and Courir, taking full ownership of ISRG in Iberia and MIG in Eastern Europe, and disposing of around 30 non-core businesses; we have upgraded our global supply chain; and we have built the required infrastructure and governance for a group of our scale.
“Reflecting slower market growth and the investments we have made in our supply chain and infrastructure, we are updating our medium-term plans to capitalise on our organic growth opportunities in North America and Europe, deliver productivity and efficiency benefits from the investments and utilise our strong cash generation to deliver improved returns for our shareholders.”
What will this mean in practice? It’s “evolving medium-term plans to focus on growth, profitability and improved returns”. In North America it will leverage “our multi-fascia customer proposition to grow ahead of the market and improve our return on space”; in Europe it will “improve profitability by focusing on key markets and delivering European supply chain investment benefit”, while accelerating growth of the Courir brand; and in the UK specifically it aims to “stabilise and improve productivity”.
Capex will “trend from 5% to 3%-3.5% of revenue, reflecting the end of our heightened investment phase”. And with its 20% non-controlling interest in Genesis, the holding company for its North American business, it's deferring taking outright control until later this decade rather than starting from this year.