British sportswear retailer JD Sports Fashion (JD.L) is confident it will meet annual profit forecasts after its multi-brand strategy boosted half-year results even as Nike, which accounts for 45% of its sales, struggles.
FTSE 100-listed JD, which also sells Adidas, On, HOKA and other brands in Britain, Europe and the United States, said on Wednesday its growth plans were on track despite what it called a competitive and promotional marketplace.
Nike (NKE.N) on Tuesday posted disappointing quarterly sales growth and warned its holiday season would likely be filled with discounts.
Worries over Nike hit shares in JD Sports in early deals. They traded down 3% to 145 pence, and have lost about 10% of their value in the year to date.
"We expect short term growth concerns over demand volatility and for Nike's underperformance to continue to weigh on JD's valuation," Investec analysts said in a note.
Nike's biggest competitor, German sportswear brand Adidas (ADSGn.DE), has been gaining traction with its Samba and Gazelle sneakers, while nimbler rivals On and Deckers' HOKA (DECK.N) are also taking market share.
JD Chief Executive Regis Schultz said those labels were helping it outperform the market.
"Our multi-brand model and the agility that we have around moving across different brands is the recipe of our success," he told reporters.
Signalling his hopes for a turnaround at Nike, he said he was "very happy" about the appointment of Nike veteran Elliott Hill as the sportswear giant's new boss.
In the 26 weeks to Aug. 3, JD posted adjusted pretax profit of 405.6 million pounds ($538.8 million), beating analysts' expectations of 384 million pounds.
For the full financial year, JD reiterated its guidance for profit of between 955 million pounds and 1.035 billion pounds, up from 917.2 million pounds in 2023/24.
($1 = 0.7528 pounds)
