JD Sports hits £1bn thanks to Nike Air Force One shoes



PROFIT at JD Sports will exceed £1bn next year as CEO Régis Schultz ignores the negative chatter about the state of the UK economy and insists the company’s own growth potential is too great.

JD Sports has transformed from a penny stock to a £7bn FTSE 100 giant, challenging critics who once took an arrogant attitude towards its products and customers.

Today, JD showed its enduring appeal, with its Christmas sales up 20% and expectations of further growth from sportswear brands.

In particular, sales of Nike Air Force One shoes have exploded.

Shares rose 7% to 151p.

While the headlines are worried about inflation and energy costs, analysts point out that many JD customers are young people who don’t have a home and are sheltered from that storm.

The new managing director, Régis Schultz, was optimistic and insisted there was no need to be too negative about this year despite the economic headwinds.

“People like to paint things black. But unemployment is low… and people can get better-paying jobs. That generates a lot of income.” “It’s incredible to see JD’s success all over Europe. We are bigger in Europe than England. The brand produces a lot of good stuff outside of the UK.”

By 3 February 2024 profits for the full year should be just over £1 billion, which is an extraordinary figure. The business was mostly founded by retail guru Peter Cowgill, who was vaguely overthrown last year after a corporate governance controversy. After legal wrangling, he was given a golden farewell of £5.5m.

Today’s figures show that the business has successfully departed from the Cowgill era. Some of his later purchases, such as Liam Gallagher’s Pretty Green, remained unresolved.

Even if customers feel the pressure, JD can still benefit from it.

Zainab Atiyyah, retail industry analyst at Third Bridge, said.

“Our experts expect JD Sports margins to remain under pressure for some time as customers abandon on-demand purchases and trade declines, and more promotional activity is required. This is a great opportunity for JD Sports to leverage their brands and build their value proposition.”

JD said in a statement: “Management is confident that consumers worldwide are more interested than ever in JD’s differentiated offering, with its attention-grabbing in-store theater, advanced digital technologies, wide range of brands and availability of essential styles.”

Gym-based New Year’s Resolutions can also provide a boost.

Sarah Riding of law firm Gowling WLG said:

“JD Sports has done well as we approach Christmas and will likely benefit from an increase in consumer demand as people start the New Year with health at the top of their agenda and gym memberships typically experience a surge.”

“Inflation costs and pressures on daily life may impact the sports retailer in the months ahead. However, the business’s omnichannel approach positions itself above some of its online-only competitors. Indeed, recent sales have given the Frasers Group 15 brands, the company’s international market presence. It will help him invest that money by focusing on core sports brands.”

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