JD Sports maintains ‘promotional discipline’ in the face of falling sales
The retailer has fallen victim to operating in a promotional market, it says, with UK sales dropping by 8.3% last year.
JD Sports has seen its UK sales drop, as it maintains “promotional discipline” in an environment where competitors are discounting heavily.
Across the retailer’s full 2024 financial year, which ended 3 February 2023, UK revenues declined 8.3% to £3.51m. Going into the 2025 financial year, the retailer has continued to see sales fall in the UK, with like-for-like sales down 6.4% in the first quarter.
The markets in which the retailer operates in, particularly in its online and apparel sectors, have been particularly prone to promotional activity and markdowns in recent times, the business’s chief financial officer Dominic Platt noted, speaking to investors today (31 May).
JD Sports has “never” been a brand to engage in lots of promotions, asserted CEO Régis Schultz. This “promotional discipline” in the first quarter of the 2025 fiscal year, did cause the brand to lose out on sales in the UK, as competitors became “nervous” about selling excess stock.
“We are focusing on profitable sales in the UK, we’re not participating in the promotional environment, particularly, and therefore, it’s not a surprise that our sales are backwards a bit,” asserted finance chief Platt.
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While the business has been focusing on chasing profitable sales, it did see its profit before tax for the year decline by 7.5% to £917.2m, something that the business said reflects investments it is making in its supply chain and operating systems.
“These investments are the right choices for the business,” Schultz added.
The promotional market is creating an ongoing “quite volatile” environment, but the business remains confident that opting not to participate too heavily in discounting is the correct stance, its leadership asserted.
As well as a promotional environment affecting UK sales, the business noted that divestment of its non-core properties also contributed to lower revenue in fiscal year 2024. JD Sports’ focus going forward is profitable brands that complement each other.
The sportswear retailer has also been hit by a general slowdown in the sports apparel market post-pandemic, comments GlobalData analyst Louise Deglise-Favre. She notes that it will hope to be boosted by an upcoming “summer of sport” with the Euros and Olympics taking place.
Focusing on the core is a key pillar of JD Sports’ growth strategy going forward, as is growing its store portfolio. In its last financial year it opened around 200 new stores, with a similar level planned for this year.
The brand has also been investing in its loyalty programme as part of its omnichannel proposition, designed to give it a “better single view of the customer”. Following a trial, JD Sports’ loyalty scheme was launched in the UK over its last financial year.
By the end of the year, JD Sports saw 800,000 loyalty app downloads in the UK, of which 75-80% were active users. It reports that the average transaction value of its loyalty scheme members in the UK is over 40% higher than non-members.
The business reports that it is working to improve the targeting of offers available to loyalty scheme members, particularly by allowing members to link their account to their Nike membership, with the brand being one of the most popular sold by the retailer.
