British sportswear retail giant JD Sports Fashion beat analysts’ forecasts for first-half profit that showed its multi-brand strategy working at a time when some big labels that its sells, such as Nike, were struggling. The company said its performance got better as the half wore on, with it clearly shaking off the earlier dip that had seen its share price falling.

The company was upbeat on Wednesday, despite the “competitive and promotional” marketplace.

In the 26 weeks to August 3, JD Sports saw adjusted pre-tax profit of £405.6 million. Analysts had expected £384 million.

CEO Regis Schultz said that “our success is a direct reflection of the strength and agility of our global, multibrand strategy, which allows us to adapt swiftly to fast-changing industry trends across the world”.

In a global sportswear market benefiting from long-term structural growth, it “continued to outperform”. Organic sales growth was 6.4% with like-for-like (LFL) sales growth of 0.7%. 

Group revenues were up 5.2% to £5 billion and up 6.8% in constant currency. But while adjusted profit before tax was up 2% at £405.6 million statutory reported profit before tax was actually down 64.3% at £126.3 million. 

It also said “good progress was made across our three core segments: JD, Complementary Concepts and Sporting Goods & Outdoor”.

The company said its JD brand saw double-digit organic growth across Europe, North America and Asia Pacific. It opened 83 new JD stores, including the largest ever JD store in Stratford, London in April, and is on track to open around 200 new JD stores in the full year. And it transferred an additional 19 stores to JD from Finish Line in the US, MIG in Eastern Europe and ISRG in Iberia.

It completed the acquisition of Hibbett, “adding material scale and presence” in North America, through its 1,179 stores in the southeastern US. But it said the completion of the Courir acquisition remains subject to clearance from the European Commission.

The company added that it made good progress on omnichannel with ‘ship from store’ rolling out across Europe and a successful ‘click and collect’ trial in France.

Looking further into the details of its performance, revenue growth was impacted negatively by 2.8% due to prior period revenue from disposals and 1.5% from currency. There was also a 1.9% benefit from the timing impact of the previous 53-week year.

In terms of its segments, JD represented 71% of both its revenue and profit before tax and adjusting items in H1. JD grew revenue 7.1% and achieved a gross margin of 49.5%. Profit before tax and adjusting items was down 2% reflecting the ongoing investment in the whole group’s future growth. 

Complementary Concepts’ revenue grew 12.3% with profit before tax and adjusting items up 15.7%, “both reflecting good performances from our existing community fascias, Shoe Palace and DTLR, and the contribution from Hibbett”. 

Sporting Goods and Outdoor saw revenue drop 4.5% but profit before tax and adjusting items grew 16.2%, reflecting partly disposals of loss-making stores in the period.

Geographically, its two fastest growing regions, Europe and North America, saw organic sales growth of 10.1% and 10.7%, respectively, with the rollout of the JD the key factor here. 

In the UK, trading improved as H1 moved forward, but year-on-year performance was “held back by non-core divestments made during the prior period and the UK’s higher weighting towards both online and apparel”. 

LFL trading in Asia Pacific was down due to tough comparatives, although the region achieved double-digit organic sales growth. 

The retailer’s pivot toward becoming a more global business continued with North America generating 35% of revenue, Europe 31%, the UK 30% and Asia Pacific 4%.

It added that footwear has continued to trade better than apparel, although both categories grew in the period. Footwear in the lifestyle space “is a resilient, growth category driven by the continued growth in ‘sneakers’ around the world”. Growth here was 9.6% and footwear’s share of its revenue increased 2.4%pts to 59.8%. 

Apparel was “again held back by challenging weather conditions, particularly in the UK and Europe” as spring and summer saw plenty of rain. This had a knock-on effect on margin as prices were slashed in the summer sales season ahead of the back-to-school period and then into AW24 too. Apparel revenue was up 0.7% with its share of revenue falling 1.4%pts to 29.8%.