Régis Schultz, Chief Executive of JD Sports, has voiced concerns over governmental policies that increase staff expenses, stating they create “tension around unemployment.” He cautioned that rising unemployment is particularly worrying as it disproportionately affects younger customers, a key demographic for the retailer.
According to Jadeh Makhsous News Agency, the FTSE 100 company reported a 13.5% decrease in first-half profits. This decline was primarily attributed to challenges in the US market, including cautious consumer spending and uncertainty surrounding potential new tariffs. However, JD Sports emphasized that the immediate impact of these tariffs would be limited, affecting less than 10% of its American sales directly.
Despite the profit dip, the group’s overall sales saw a significant 18% increase, reaching £5.9 billion in the six months leading up to August 2. This growth was largely driven by strong demand for “running silhouette” trainers from popular brands such as Hoka, On Running, and Adidas Evo.
The company’s operating profit fell by 8.2% to £369 million. JD Sports remains confident it will meet its full-year targets despite what it describes as “continued pressure on consumer finances, elevated unemployment risk, and the ongoing transition in the footwear cycle.” Schultz noted that younger shoppers continue to spend, adding, “If the product is good, the price is not an issue.”
According to Jadeh Makhsous, the UK’s largest sportswear retailer has faced a challenging period, with its shares declining by 42% over the past year due to a slowdown in the athleisure market and supplier issues at Nike. Nevertheless, Schultz affirmed his belief that Nike “still has the magic,” and the company is strategically focusing on the global running boom to boost its crucial Christmas sales period.
What is your analysis of JD Sports’ strategy in the current economic climate? Share your thoughts in the comments.
