REG - JD Sports Fashion - MEDIUM-TERM PLAN UPDATE

JD Sports FashionAnnouncement

09/04/2025 12:00

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RNS Number : 3278E  JD Sports Fashion PLC  09 April 2025

9 April 2025

 

JD SPORTS FASHION PLC

 

MEDIUM-TERM PLAN UPDATE

 

JD Sports Fashion Plc (the 'Group'), the leading retailer of sports, fashion
and outdoor brands, today announces an update on its medium-term plans.

Régis Schultz, CEO of JD Sports Fashion Plc, said:

"JD operates within an attractive, long-term growth market and we are well
positioned to continue growing market share. We have strong brand partner
relationships and an agile, multi-brand model which allows us to drive, and
respond quickly to, market trends. We are highly cash generative and
disciplined in terms of our capital allocation opportunities.

"We have made significant strategic progress over the last two years: we have
accelerated the growth of the JD brand, particularly in North America and
Europe; we have continued building a global sports fashion powerhouse through
the acquisitions of Hibbett and Courir, taking full ownership of ISRG in
Iberia and MIG in Eastern Europe, and disposing of around 30 non-core
businesses; we have upgraded our global supply chain; and we have built the
required infrastructure and governance for a group of our scale.

"Reflecting slower market growth and the investments we have made in our
supply chain and infrastructure, we are updating our medium-term plans to
capitalise on our organic growth opportunities in North America and Europe,
deliver productivity and efficiency benefits from the investments and utilise
our strong cash generation to deliver improved returns for our shareholders."

Highlights

·      Evolving our medium-term plans to focus on growth, profitability
and improved returns

o  North America: leverage our multi-fascia customer proposition to grow
ahead of the market and improve our return on space

o  Europe: improve profitability by focusing on key markets and delivering
European supply chain investment benefit

o  UK: stabilise and improve UK productivity

·      Updated, balanced capital allocation priorities, reflecting
improved cash generation

o  Capital expenditure to trend from 5% to 3-3.5% of revenue, reflecting the
end of our heightened investment phase

o  Agreement to defer Genesis(1) buyout to 2029 and 2030

o  Launch of an initial £100m share buyback programme

(1)There is a 20% non-controlling interest in Genesis, the holding company for
our North American business. This was scheduled initially to be bought out by
the Group via four tranches of 5% across 2025-2028. This has now been deferred
to two tranches of 10% across 2029 and 2030.

Strategic progress to date

Our current five-year strategic plan was launched in February 2023 with the
aim of building a leading sports fashion powerhouse. We created four strategic
pillars to cover the main elements of the plan: JD First; Complementary
Concepts; Beyond Physical Retail; and People, Partners & Communities. Over
the first two years of the plan, we made significant progress across all four
of our strategic pillars: -

·      JD First

o  Opened c.400 new JD stores globally, delivering average payback of less
than three years

o  Developed and launched our capital-light franchise model

·      Complementary Concepts

o  Improved our reach with the acquisitions of Hibbett and Courir for £1.4bn

o  Took full ownership of ISRG in Iberia and MIG in Eastern Europe, and
disposed of c.30 non-core businesses

·      Beyond Physical Retail

o  Upgraded our global supply chain with the opening of new distribution
centres in the Netherlands, US west coast and Australia

o  Developed our JD Status loyalty programme; now over 8m active users
worldwide

·      People, Partners & Communities

o  Built a governance, controls and systems infrastructure to support our
global scale with significant capital and operating investment

o  Invested over £100m of additional people cost across minimum wage
increases and removal of under-age wage banding

Medium-term plan update

JD Group has become the leading, global Sports Fashion powerhouse. Our four
strategic pillars and our business model position us well to deliver long-term
growth, healthier margins and stronger cash generation. Global sports fashion
is an attractive and growing market, but we now expect it to grow at a slower
rate over the medium term. We are therefore adapting our plans to capitalise
on our growth opportunities and the investments we have made in our
infrastructure over the last two years to improve returns for our
shareholders.

Across our four strategic pillars, there are a number of focused actions to
highlight: -

·      JD First

o  Build JD brand awareness in North America through the opening of new
stores and completing the conversion of Finish Line stores to JD

o  Improve Europe profitability by focusing on key markets and delivering
supply chain investment benefits

o  Improve UK productivity through investment in our estate and delivering
cost efficiencies

·      Complementary Concepts

o  Capitalise on our multi-fascia customer proposition in North America to
grow ahead of the market and improve our return on space

o  Accelerate growth of the Courir brand in Europe

o  Enhance our European Sporting Goods business and sharpen our UK Outdoor
business

·      Beyond Physical Retail

o  Deliver benefits from our significant supply chain investment in the last
two years

o  Integrate US supply chain and systems on time and to budget delivering
targeted synergies

o  Continue to improve our omnichannel proposition

·      People, Partners and Communities

o  Deliver benefits from our investments in people and systems across support
functions

Capital priorities and shareholder returns

Our strategy to drive shareholder value will be led by growing organic revenue
ahead of the market and growing profit ahead of revenue. This will drive
strong cash generation and enhance shareholder returns.

Underpinned by a strong balance sheet, our capital allocation priorities are:
-

·      Organic investment in the business. We will invest to capitalise
on our growth opportunities across North America and Europe, and maintain our
disciplined approach on store investment to deliver a three-year payback. As
we come to the end of our significant investment in our supply chain and
infrastructure, we expect capital expenditure to trend from c.5% of revenue to
3-3.5% over the medium term.

·      Ensure we can meet future commitments. Reflecting the important
role the Mersho family continues to play in the integration, development and
long-term growth of our North American business, we have agreed to defer the
buyout of their 20% non-controlling interest in Genesis, the parent company of
our North American business, to two tranches of 10% each in 2029 and 2030.

·      Pay a progressive dividend.

·      Using surplus cash to improve returns. We anticipate generating
material surplus cash after those commitments. This cash can be applied to
increasing investment in the Group, M&A or to providing incremental
returns to shareholders.

As we are now moving into a lower phase of capital investment with no material
M&A opportunities in the pipeline, and reflecting the liquidity headroom
created by the deferral of the Genesis option, we are in a position to provide
incremental shareholder returns. In line with this, the Board intends to
announce the commencement of an initial £100m share buyback programme.

Enquiries:

JD Sports Fashion
Plc
            Tel:  0161 767 1000

Régis Schultz, Chief Executive Officer

Dominic Platt, Chief Financial Officer

Mark Blythman, Director of Investor Relations

 

Advisors

Bank of America - Antonia
Rowan
Tel: 0207 628 1000

Peel Hunt LLP - Dan
Webster
            Tel: 0207 418 8869

FGS Global - Rollo Head, Jenny Davey, James
Thompson
Tel: 0207 251 3801

 

Cautionary note regarding forward-looking statements

This announcement contains certain forward-looking statements relating to
expected or anticipated results, performance or events. Such statements are
subject to normal risks associated with the uncertainties in our business,
supply chain and consumer demand along with risks associated with
macro-economic, political and social factors in the markets in which we
operate. Whilst we believe that the expectations reflected herein are
reasonable based on the information we have as at the date of this
announcement, actual outcomes may vary significantly owing to factors outside
the control of the Group, such as cost of materials or demand for our
products, or within our control such as our investment decisions, allocation
of resources or changes to our plans or strategy. The Group expressly
disclaims any obligation to revise forward-looking statements made in this or
other announcements to reflect changes in our expectations or circumstances.
No reliance may be placed on the forward-looking statements contained within
this announcement.

Analyst and investor Q&A

We will be hosting an invite-only event for institutional investors and
analysts at 1400 BST on 9 April 2025 with CEO Régis Schultz and CFO Dominic
Platt. The presentation will be held at Peel Hunt, 100 Liverpool Street,
London, EC2M 2AT and it will end no later than 1530 BST. The presentation will
focus on an update on the Group's medium-term plan.

To register for the live webcast of this event, please visit the following
link:

https://app.webinar.net/eKmVwr3PWq0
(https://urldefense.com/v3/__https:/app.webinar.net/eKmVwr3PWq0__;!!KZXpRQ!X3Ba2BthG6wqzlrtHdWo6ArvnzW7RbJ67y2jmKR7YqaFTWoP6A6Hs1FzBOEBsywneDqzY_pZALWGRmKiO1X3VuMy0gFOcA$)

If you are unable to attend in person and wish to ask questions, please visit
the following link:

https://registrations.events/direct/Q4I1899877
(https://registrations.events/direct/Q4I1899877)

For those unable to attend in real time, either in person or virtually, the
presentation will be made available directly following the live presentation
on the Investor Relations section of the JD PLC website:

Results Centre | JD Sports Fashion (jdplc.com)
(https://urldefense.com/v3/__https:/www.jdplc.com/investor-relations/results-centre/default.aspx__;!!KZXpRQ!X3Ba2BthG6wqzlrtHdWo6ArvnzW7RbJ67y2jmKR7YqaFTWoP6A6Hs1FzBOEBsywneDqzY_pZALWGRmKiO1X3VuNlANeG7w$)
.

2025 financial calendar

21 May: FY25 results/Q126 update

July: Annual General Meeting

August: Q226 trading update

September: H126 results

November: Q326 trading update

About JD Sports Fashion Plc

Founded in 1981, the JD Group ('JD') is a leading global omnichannel retailer
of Sports Fashion brands. JD provides customers with the latest sports fashion
through working with established and new brands to deliver products that our
customers most want, across both footwear and apparel. The vision of JD is to
inspire the emerging generation of consumers through a connection to the
universal culture of sport, music and fashion. JD focuses on four strategic
pillars: JD Brand First, first priority, first in the world; leveraging
Complementary Concepts to support JD Group global expansion; moving Beyond
Physical Retail by building the right infrastructure and creating a lifestyle
ecosystem of relevant products and services; and doing the best for its
People, Partners and Communities. JD is a constituent of the FTSE 100 index
and had 4,850 stores worldwide at 1 February 2025.

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