On the company’s fiscal 2024 earnings call, JD Sports chief executive officer Régis Schultz faced a barrage of questions from analysts related to the retailer’s business with Nike.
Overall, the CEO said that Nike has performed “a little bit slow” in recent quarters, as the sportswear company has been relying too heavily on core franchise products and has lacked new product innovation.
“I think Nike has been banking on Air Force 1 and Dunk, and I think it’s still selling very well,” Schultz said on Thursday’s call. “But I think we can see that it’s starting to slow down and need something new to come and refresh that. And I think what we are seeing is the smaller brands are coming with a lot of innovation.”
Schultz clarified on the call that when he says innovation, he means new ideas in color, silhouette and material, not necessarily in “new technology that transforms the world.” Adidas, he said, is one company that is doing this concept well.
“A good example of that is the excellent work that Adidas is doing on the Samba and also Terrex brand,” the CEO noted. “Every month we have new release of the same silhouette, but with a little bit of twist, and that’s working very well. It works very well with size, which is, for us, an early sign of this coming for the market.”
Back at Nike, Schultz noted that the new Air Max Dn sneaker that launched Tuesday was a good example of the type of launches the brand needs to be doing going forward. “The most important thing is for Nike to recognize that they need to bring something new to the market,” he said. “And we see some product coming for end of the year, but mostly beginning of next year, that are exciting as a buyer.”
This sentiment comes one day after several analysts gave their own takes on how Nike’s Air Max Day went this year. The event, which marks the anniversary of the first-ever Air Max launch in 1987, came at a precarious time for Nike, which has recently come under criticism for its lack of innovative new products. In response to the criticism, Nike last week announced its plan to build a “multiyear cycle of innovation” to win over consumers.
But the slowdown in its Nike business didn’t affect the company’s “outperformance” in fiscal 2024. JD Sports said in a trading update on Thursday that total sales grew 3.6 percent in the year to 10.5 billion pounds (or $13.27 billion). Profit before tax and adjusted items for the year to January 2024 is expected to be in line with the revised guidance range of 915 million pounds to 935 million pounds, the company said.
In the fourth quarter of fiscal 2024, JD Sports reported like-for-like sales were marginally ahead that the same time last year, up 0.1 percent.
Looking ahead, JD expects sales growth in fiscal 2025 to be up 1 percent to 4 percent over 2024, with profit before tax and adjusted items to be between 955 million pounds and 1.035 billion pounds.
