JD Sports projects substantial revenue growth from the US market, aiming for 45% contribution by 2025.
- Current JD Sports revenue comes mainly from the UK and Europe, but focus is shifting to the US.
- CEO Régis Schultz hints at potential expansion into South America along with the US growth strategy.
- Recent financial results show a steady increase in both like-for-like and organic sales for JD Sports.
- The company remains optimistic about future growth despite volatile market conditions.
JD Sports is setting its sights on significant expansion in the United States, with CEO Régis Schultz expressing an ambition for the US market to represent 45% of the company’s turnover by the end of 2025. Currently, the UK and Europe are substantial markets, accounting for 20% and 30% respectively. The focus may soon broaden to regions such as South America, according to Schultz, indicating the potential for a more global footprint.
The announcement aligns with JD Sports’ recent half-year trading update. i>The company reported that growth in North America was a notable 5.7%, while Europe saw an uptick of 3.0%. The UK market, deemed more mature by Schultz, experienced a material improvement quarter-on-quarter. This data underscores the company’s strategy to harness the strengths of its multi-brand operating model.
Financial outcomes for the period show a like-for-like sales increment of 2.4% and organic sales growth reaching 8.3%. Schultz attributed these positive results to adept promotional tactics and proactive inventory management. He noted that while the market remains unpredictable, JD Sports maintained promotional discipline, supporting gross margins.
The reported gross margin stood at 48.4%, though it represented a slight decrease of 30 basis points from the previous year. The reduction was chiefly observed in apparel and online sectors, most significantly impacting the UK. However, the group’s financial agility is evident in its capability to drive double-digit organic sales growth in key regions like North America and Europe.
Schultz highlighted the company’s operational flexibility, stating, “I am pleased to report like-for-like sales growth of 2.4% and organic sales growth of 8.3% in the second quarter, demonstrating the strength and agility of our multi-brand model.” This resilience is crucial as JD Sports continues to roll out its JD store programme across North America and Europe.
In conclusion, JD Sports is poised to enhance its market presence significantly in the U.S., in line with its strategic expansion goals.
