LONDON - JD Sports Fashion (LON:JD) Plc, a prominent retailer of sports and fashion brands, has revised its medium-term plans, focusing on growth and profitability while prioritizing shareholder returns. The company announced these updates today, emphasizing its position in a competitive market and outlining strategic progress made in recent years.
JD Sports, under CEO Régis Schultz, has adapted its strategies to address slower market growth and capitalize on investments in supply chain and infrastructure. The updated plan includes a reduction in capital expenditure from approximately 5% to 3-3.5% of revenue, reflecting the completion of a significant investment phase. Additionally, an initial £100 million share buyback program has been launched, signaling a shift towards providing increased shareholder value.
The company has made notable strategic advancements since the launch of its five-year plan in February 2023, including the opening of around 400 new JD stores globally and the development of a capital-light franchise model. Acquisitions such as Hibbett and Courir have expanded JD Sports' reach, while full ownership of ISRG in Iberia and MIG in Eastern Europe has been secured. The disposal of approximately 30 non-core businesses has further streamlined operations.
Investments in the supply chain have been significant, with new distribution centers in the Netherlands, the US west coast, and Australia. The JD Status loyalty program now boasts over 8 million active users worldwide.
The updated plan aims to build brand awareness in North America through new store openings and the conversion of Finish Line stores to JD. In Europe, the focus will be on key markets to improve profitability, while in the UK, efforts will be made to stabilize and enhance productivity.
The company's capital allocation priorities have been recalibrated to ensure organic investment in the business, particularly in North America and Europe. The deferral of the buyout of a non-controlling interest in Genesis, the parent company of JD Sports' North American business, to 2029 and 2030, reflects the ongoing contribution of the Mersho family to the business's growth.
JD Sports' strategy is to grow organic revenue and profit ahead of the market, driving strong cash generation and enhancing shareholder returns. With a solid balance sheet and a disciplined approach to investment, the company is poised to capitalize on growth opportunities while maintaining a commitment to progressive dividends and the prudent use of surplus cash.
This update is based on a press release statement from JD Sports Fashion Plc.
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