British sportswear giant JD Sports Fashion has reported strong first-half results, attributing its performance to the surging demand for Nike Air Force One and Adidas Gazelle and Samba sneakers. This boost in sales has put the company on track to achieve higher annual profits, causing its shares to rise by 7.5 percent.
JD Sports, already the United Kingdom’s largest sportswear retailer with an expanding presence in North America and Europe, disclosed that its group underlying sales rose by an impressive 12 percent during the period. This growth was predominantly fueled by a remarkable 27 percent increase in European sales and a solid 15 percent rise in North America.
One of the key factors contributing to JD’s success is its strong relationships with major brands like Nike, Adidas, and New Balance. These relationships grant JD early and, at times, exclusive access to certain products, enabling the retailer to outperform its competitors.
While other retailers in North America, such as Foot Locker and Dick’s Sporting Goods, have expressed concerns about weakened consumer demand and thinner profit margins, JD Sports’ results suggest that the U.S. market remains robust for the right products.
JD Sports CEO Régis Schultz highlighted the company’s status as Nike’s largest global retail partner and emphasized that these brand relationships will continue to drive growth in a post-pandemic environment where consumers are inclined to treat themselves despite economic uncertainties.
Schultz commented, “I think customers are really looking at expanding their wardrobe in terms of sneakers. I think that it’s a very affordable luxury to change sneakers every day.”
Unlike many retailers, JD Sports has weathered the challenges posed by the last two years of high inflation relatively well. Its predominantly younger customer base has continued spending, while it was the parents of these customers who felt the brunt of increased living costs.
The group’s ambitious expansion plans involve investing up to £3 billion to open 1,750 stores over the next five years, aiming to become a global athletic leisurewear powerhouse. This year, JD Sports acquired France’s Groupe Courir and bought out its partners in its Iberian and Polish businesses.
For the fiscal year ending in January, JD Sports is on track to achieve an annual pretax profit of £1.04 billion ($1.28 billion), marking a 5 percent increase compared to the previous year.