JD Sports Fashion Plc ($JD)

Good morning, everyone, and thank you for joining us. I'm Régis Schultz, CEO of JD Group, and I'm joined here today by Dominic Platt, our CFO; and also very happy to introduce Jetan Chowk, our Chief Technology Officer, who is on our Q&A panel. So the agenda for the day is the following. I will start with our key message and highlights for the year. Then I will hand over to Dominic to go through the financials and guidance. And finally, I will take you through the key business update. For today, I have five key message. First, everything starts with the consumer. We are offering our customers the latest and the greatest towards fashion product in our vibrant and elevated retail theater. This customer-first approach, combined with cost and capital control delivered a resilient performance for JD against a tough trading environment. Second, we are pleased, I'm going too quickly, sorry. Second, we are pleased with our momentum in North America with a 3.2% organic growth, which is comparable to our main competitor definition of like-for-like. We have invested further in the JD brand and made significant operational improvement across the region. North America is now our first region in terms of sales and in terms of profit. Third, our free cash flow is up 36% year-on-year to GBP 462 million, supported by a 3% increase in our operating cash flow, which is the equivalent to EBITDA under old fashion accounting rules. In FY 2026, we reached GBP 12.7 billion turnover. It's compared to GBP 8.6 billion in 2022, achieving double-digit growth per year. We are now a double-digit market share in all our markets, North America, Europe, Australia, New Zealand and U.K. And our profit for FY '26 is GBP 852 million, which is down GBP 100 million versus FY '22, but our operating cash flow is up by GBP 200 million compared to 2022. This reflects the investment we had to make in staff costs to give our young colleagues an equal remuneration, in governance and in infrastructure, supply chain, cybersecurity system in what was an under-invested business. Fourth, given our strong cash generation, which we expect will continue, we are announcing today a proposed 20% dividend increase for FY '26 and a rolling GBP 200 million annual share buyback. Finally, our FY '27 guidance is all about controlling the controllable and for the consumer, advancing our five key strategic priority at pace. I will take you through each of these later. Let me now hand over to Dominic to run through the financial results.

Good morning, everybody. Good to see you all, and thank you, Régis. I'll start with our headline financials. I'll start with our headline financials here on Slide 5. Unless stated otherwise, all commentary is on a constant currency basis. Total sales were up 11.7%, reflecting a full year of sales from Hibbett and Courir, which were acquired in July and November, respectively, in the prior year. As a reminder, we have restated our prior year gross margin following a reclassification between OpEx and cost of sales of certain costs related to commercial activities and logistics. This is to reflect a more appropriate accounting presentation. And as a result, FY '25 gross margin has moved from 47.8% to 47%. In FY '26, against a tough market backdrop in all our regions, we maintained our trading discipline. To stay competitive and engage with our customers, throughout the year, we made controlled price investments, particularly in our online offer. The underlying impact of these investments was a reduction of 30 basis points. This was fully offset by marketing contributions, which were higher year-on-year. The corresponding marketing costs that are funded by these contributions are now classified in OpEx for accounting presentation purposes. So overall, statutory gross margin was therefore flat year-on-year. Operating costs were 14.6% higher, driven by costs related to organic new stores and the annualization of Hibbett and Courir. Excluding these items, like-for-like operating costs were flat year-on-year. More on that later. Overall, the group's operating profit, including lease interest was GBP 886 million, 4% lower with an operating margin of 7%. Profit before tax and adjusting items was GBP 852 million, 6.4% lower and in line with the guidance provided in our Q4 trading update. Our adjusted earnings per share were 5.5% lower on a reported basis at 11.71p. For completeness, statutory PBT was GBP 629 million, 12% lower year-on-year. This reflects slightly higher adjusting items year-on-year, which consists mainly of noncash impairment costs arising from actions we are taking to optimize the portfolio. Régis will cover this in more detail later. We generated free cash flow of GBP 462 million, up GBP 123 million or 36% year-on-year, and this was supported by our cost and capital discipline. Reflecting this strength, the Board has proposed a total ordinary dividend of 1.2p per share, 20% higher year-on-year. So moving now to our sales bridge year-on-year. The left-hand side rebases FY '25 for an FX headwind of 1.2 percentage points as well as for some small disposals from last year. Like-for-like sales were 2.1% lower. Net new space contributed 4.2 percentage points of sales. This demonstrates the productivity of our new space despite the net closure of 39 stores year-on-year. And as a reminder, in line with most retailers, we include store relocations and upsizes in our new space definition. When you're benchmarking, it's worth noting that some of our peers do not. Net space growth was supported by the opening of five flagship JD stores, including the Trafford Center in Manchester, where we continue to see very strong results. Overall, organic sales growth was 2.1%. Based on our analysis, leveraging internal resources, external panels and peer data, we believe this is at least in line with the growth of our addressable markets. And completing the bridge, Hibbett and Courir added GBP 1.1 billion of sales for an overall sales growth of 11.7%. As you can see on this slide, the JD Group is a well-balanced, diversified and global business. 75% of our sales come from North America, Europe and Asia Pacific, and we have significant runway to further grow our market shares in these regions. Our channel mix varies by region with online sales penetration in the U.K. at just over 25%, around 20% in North America and in the high teens in Europe and Asia Pacific. This provides ample opportunity for growth, particularly outside the U.K. As Régis will touch on later, we've made significant progress in building out our fully flexible omnichannel proposition, and we're strengthening our ecosystem to meet customers wherever and however they choose to shop. Organic store sales grew by 2.2%, reflecting the continued resilience of our full price model and our store opening program. Online sales were up 1% with good growth in North America and Europe, supported by the ongoing evolution of our ranging and technology platforms. In the U.K., online sales were down in a more promotional market, reflecting near-term industry and consumer dynamics. Turning now to category. Our agile multi-brand, multi-category model provides natural diversification through our footwear, apparel and accessories proposition. In footwear, organic sales were flat year-on-year. Throughout FY '26, we saw a significant shift in the global footwear product cycle, given the transition between newer but smaller franchises and larger end-of-cycle lines. Reflecting the strength of our model, we saw strong growth across brands more in the middle of their product cycles with further support from newer footwear categories that Régis will touch on later. In apparel, organic sales grew by 5%, driven by our broad and energized proposition as we continue to enhance our assortment across athleisure, performance and streetwear. We believe there's significant scope for growth in this category, particularly in North America, where our apparel mix is low compared to other regions. Despite stronger organic sales growth in apparel, the category sales mix reflects the full year sales from Hibbett and Courir, both of which are more footwear-centric than our other group faces. Quickly touching on our smaller categories in accessories, a lot of which is actually apparel, such as baseball caps and socks, organic sales were up 11%, driven by strong growth in our sporting goods businesses. And other, which includes outdoor living equipment and JD Gyms memberships, maintained its share of 3% of our sales mix. Turning now to our geographic regions and starting with North America. While like-for-like sales were 1.8% lower, we saw an improved performance through the year with a return to like-for-like growth in Q4, supported by disciplined execution against its trading plans and strong online sales growth. Excluding the stand-alone Finish Line business, where we continue to make progress with the ongoing wind down, like-for-like sales were 1.2% up for the year. Operating margin was 250 basis points lower year-on-year with the wind down of Finish Line, a significant but short-term factor. Finish Line continued to invest in price within its online offer to main competitiveness, and it was a primary source of promotionality amongst our faces. The lower operating margin was also driven by continued investment to strengthen the long-term positioning of JD, which continues to grow brand awareness through the year. And finally, we had a full year of Hibbett in the numbers, which is a slightly lower margin business than our other key North American faces, particularly following conversion to IFRS. Integration work across Hibbett and our other fascias, including JD, progressed well in the year, supported by procurement, technology and supply chain and logistics efficiencies. We're therefore on track to deliver annualized cost synergies of over $25 million across FY '26 and FY '27. Turning to Europe. The region delivered like-for-like sales of minus 1.2% ahead of the group, driven by good growth across our sporting goods businesses and a resilient performance at JD and supported by online sales growth. Europe's operating margin was up 20 basis points, benefiting from cost efficiencies across retail, online and supply chain operations, including the ramping up of automation at JD's Heerlen distribution center. This was partially offset by our controlled price investments, particularly in the online offer, which supported better traffic and conversion. As a reminder, we expect over GBP 20 million of cost benefits across FY '27 and FY '28 as technology and supply chain double running costs unwind. And finally, in the U.K., we saw weaker sales against a tough consumer backdrop, particularly in the online channel. Organic sales, the more relevant sales KPI given our ongoing transition to fewer, bigger, better stores, were down 2.5% for the year. The U.K. operating margin was 70 basis points lower year-on-year, largely due to operating cost deleverage impacts. Briefly touching on Asia Pacific, which delivered like-for-like sales growth of 0.4% and organic sales growth of 8.5%. Performance was supported by resilience in footwear and growth in apparel and online. Operating margin was 100 basis points lower as the business invested in infrastructure to support its store expansion program. So, taking a look now at the profit bridge on Slide 9. Please note that for the purposes of underlying analysis, I have netted off the marketing contributions in gross margin against the corresponding marketing costs within OpEx, which is reflective of how we manage and report the business internally. Starting from the left-hand side, which rebases FY '25 to account for translation FX. The underlying like-for-like gross margin reduction of 30 basis points was the equivalent of GBP 34 million. Our like-for-like sales performance at a constant gross margin contributed GBP 63 million. And note that, that's net of GBP 49 million of attributable variable OpEx savings. The next bar shows like-for-like OpEx increases of GBP 85 million, primarily driven by inflation in our labor costs, including higher salaries and national insurance rates as well as technology investments. Through our strong focus on cost management, we delivered GBP 45 million of structural OpEx savings through labor efficiencies, productivity initiatives and operational synergies. And combining this with the GBP 49 million of variable OpEx savings, we were therefore able to fully offset like-for-like OpEx increases. Rolling through from H1, we had a noncash mark-to-market charge of GBP 10 million, and we expect most of this to unwind in FY '27. The contribution from new stores and annualizations was GBP 43 million, and Hibbett and Courir added GBP 66 million. And finally, we saw a GBP 20 million increase in the net finance expense, excluding lease interest. This was largely due to interest on the debt component of our acquisition financing. On this next slide, we set out our summary cash flows for the year. Starting with our statutory PBT of GBP 629 million. Depreciation and amortization was GBP 966 million, up GBP 180 million year-on-year, reflecting the annualization of acquisitions and investment in our stores and supply chain. Lease repayments were GBP 508 million. As a result, the group's operating cash flow was a little over GBP 1.3 billion for the year, up 3.3%. This metric is essentially EBITDA under IAS 17 and represents a very resilient performance given the tough backdrop we are operating in. The change in working capital resulted in a net outflow of GBP 248 million. This was due to an increase in inventory of GBP 55 million to support new stores and an outflow of GBP 193 million in net payables, reflecting the timing of payments and lease incentive receipts, which are essentially CapEx contributions from landlords. Gross capital expenditure in the year was GBP 401 million, down GBP 114 million on the prior year, largely reflecting the completion of our supply chain investment phase, which saw associated CapEx 60% lower in FY '26. Tax, interest and other cash payments were GBP 198 million and includes about GBP 50 million of timing and phasing benefits. Taking all that into account, free cash flow was GBP 462 million, an improvement of GBP 123 million or 36% on last year and represents a 35% conversion of EBITDA. After dividends and share buybacks of a combined GBP 253 million, we saw an increase in net cash of GBP 259 million year-on-year, leading to a closing net cash position on the balance sheet of GBP 311 million. Turning to Slide 11, and we've done what we said we'd do. We managed our inventory and cash with focus and discipline, and we have maintained a strong balance sheet. Closing net inventory was flat year-on-year and 3% higher at constant FX rates, broadly in line with organic sales growth. This was a result of strong and disciplined management action in H2, and we've exited the year with a much cleaner book of inventory. We also continue to take a disciplined approach to CapEx with a strong focus on returns. Gross CapEx for the year was GBP 401 million, and that's equivalent to 3.2% of sales, significantly lower compared with the 4.5% of sales in the prior year. Our average return on store investment remains in line with our 3-year payback hurdle. Finally, we are maintaining a strong liquidity position with significant headroom, including IFRS 16 lease liabilities, our net debt was just over GBP 2.8 billion. This represents net leverage of 1.4x. And taking into account the Genesis buyout option in FY '30 and FY '31, our pro forma net leverage of 1.9x remains within investment-grade levels. For completeness, last year, we completed a comprehensive debt refinancing and including undrawn RCFs, our total available liquidity at year-end was around GBP 1.8 billion. So now I'll move on to our Q1 trading update and our outlook and guidance for the coming year. As a reminder, based on typical sales weightings, Q1 is our smallest quarter in the financial year. And as such, the timing of things such as key product launches can have a disproportionate impact. We maintained our commercial discipline in what continued to be a tough market backdrop. We delivered well around important customer and product moments, including EID, Easter, the U.S. tax refund season and key product launches, underscoring our ability to capture spend when it matters most. Organic sales were flat year-on-year, supported by net new space growth of 2.3%, while like-for-like sales declined by 2.3%. Weather affected performance at the start of the quarter with wet conditions in Southern Europe and the U.K. and a severe cold snap in the U.S. Trading strengthened through March with a solid performance over ED, supported by our successful delivery of new product launches. Trading in April was volatile, particularly in Europe and the U.K., with a solid performance over Easter, but lower footfall throughout the remainder of the month, partly offset by stronger in-store conversion and online sales. Our gross margin for Q1 is in line with our expectations and the qualitative guidance for FY '27, which I'll turn to in a moment. So let me now turn to our market outlook. Consistent with the commentary in our Q4 trading update, we expect market growth to be muted in FY '27, shaped by a weaker spending outlook for our core consumer demographic and ongoing product cycle evolution at some of our brand partners, particularly in footwear. Since January, we've obviously seen rapid evolution in the geopolitical and macroeconomic environment. And while JD has no direct exposure to the Middle East, we continue to monitor the situation closely, including potential second-order impacts on pricing and consumer demand. On this slide, we've set out the conditions under which we could see a weaker or indeed, on the more optimistic side, a stronger market growth outlook this year. We've also outlined where we believe annual market growth for FY '27 is currently tracking in each of our regions. Consistent with the last 18 months, we expect the U.S. customer and market to continue to be more resilient than in the U.K. and Europe, where we currently expect consumer sentiment to remain subdued. This view is subject to change as the year unfolds, and we'll provide a further update at our H1 results in September. So as much as that last slide was about the uncontrollables, this one is all about the controllables, and that's what we're focused on. As you saw earlier, we were able to fully offset like-for-like cost increases in FY '26. We are focused on driving structural efficiencies across the business. So, by way of some examples, in procurement, we reduced our delivery carrier contract costs by GBP 11 million across the U.K. and Europe. And our tech contract renegotiations unlocked $6 million of savings per annum in North America alone. We also realized significant cash savings on lease renewals in the year, which appear in the P&L as lower depreciation under IFRS 16 accounting. And talking of accounting, I'm pleased, perhaps not our auditors, to see a significant reduction in the audit fee, reflecting the progress we have made in the last couple of years in improving capability across our systems and functions in finance. Critically, there's also much more we can go after in FY '27. Last month, we began to roll out our new finance and HR systems in North America. As we consolidate platforms, we unlock the potential for shared service capabilities, enabling further efficiencies. We will also continue to leverage our new scheduling tools to optimize store staff levels based on customer activity and better drive productivity in our stores. As we make further progress in modernizing our distribution centers, including through automation, we expect to realize further scale benefits and overhead efficiencies, driving lower unit costs. And as a final example, we expect the continued rollout of self-checkout and RFID technology in stores to deliver meaningful customer and staff productivity benefits. While these are only a few examples, as we've demonstrated in FY '26, we are aiming to significantly offset inflationary like-for-like OpEx increases in FY '27 through these and other efficiency and productivity initiatives. So, bringing this all together and moving to our guidance for the year. Firstly, we continue to anticipate market growth to be muted in the near term. Within our sales performance, we expect net new space growth to contribute 2% to 3%. As in FY '26, we will continue to implement controlled price investments to stay aligned with near-term customer and market dynamics. We expect these to be weighted more towards the first half of the year. And given the rapid evolution in the geopolitical and macroeconomic environment over the last couple of months, we believe it's prudent to guide to a wider profit range than we were previously planning internally. We'll continue to closely monitor the situation in the Middle East and its potential impact on the consumer and our business if the crisis is prolonged. So overall, based on what we know today, we anticipate profit before tax and adjusting items to be within the range of GBP 750 million to GBP 850 million. And reflecting our strong cash-generative model, we expect free cash flow in the range of GBP 460 million to GBP 520 million for the year, supported by disciplined CapEx and strong working capital management. Finally, Slide 17. And in conjunction with our new 3-year cash flow target announced today, we've also updated our capital allocation framework. With our major M&A and investment cycle complete, this update reflects the next phase of JD's journey and reinforces the balance between investment in growth alongside delivering strong cash flow and cash returns to shareholders. First, we will prioritize organic growth opportunities with attractive returns and keep an open mind on inorganic bolt-on opportunities that accelerate our strategy. We expect gross CapEx to settle at around 3% to 3.5% of sales over the medium term. Second, we will maintain appropriate leverage headroom to meet future obligations, including the Genesis buyout option in FY '30 and FY '31. And in line with our confidence in our medium-term trajectory, we're committed to delivering attractive cash returns to shareholders. Building on the proposed 20% increase in our FY '26 ordinary dividend, we will deliver progressive sustainable dividend growth with the clear intention of reaching a more attractive yield over time. And this will be supplemented by the return of surplus capital via our rolling share buyback program of GBP 200 million a year. This clear and simple framework is underpinned by the strength of our balance sheet and our cash generation. So, with my review concluded, let me hand back over to Régis for the business update. Thank you.

[Music] Great. Thank you. Thank you very much for putting less loud music. So, this time, it was a little bit better. So, thank you, Dominic. Let's move now to the business update. So, for the year ahead, we are focusing on 5 key strategic initiatives. First, our product range to offer the best and most relevant product to our customer. Second, our store productivity to offer the best service to our customer at the right cost. Third, our new e-commerce platform to offer the best online and omnichannel experience to our customer. Fourth, our AI adoption to drive growth and improve our operational effectiveness. Last but not least, our loyalty program to offer more personalization to our customer. I will now take you through each of these initiatives in detail. But before doing so, let's talk about the market and our customer trends. First trend, more young people are adopting an active lifestyle with health and fitness as a priority. I was amazed to see so many young people when I joined a running club and the atmosphere. It is much more like a nightclub than a running club. We see the same trends in our GYMS business, more people, more and more young people looking not only for weight lifting, but for community social interaction. It's the same for HYROX, the same for Padel. People are prioritizing exercise, which is supporting our industry. Second, there is a clear trend for comfort in everyday wear with more consumer planning to wear comfortable clothes and shoes, supporting the long-term growth of our industry. At the same time, more than 80% of consumers wear sneaker every day. It means that the market is now maturing and is in a new phase, no more double-digit growth driven by first-time adoption, but continued growth driven by newness and repeat buy. And we see customers embracing and merging different trends, wearing athletic apparel for casual occasion or pairing athletic footwear with nonathletic apparel. Like you have seen, our JD model, Dominic, wearing our product. Same, I was at the graduation of my daughter and most of the boy were wearing suits with sneakers. We believe these are structural factors that will continue to create demand in a maturing market. The key for JD is being agile to identify trends and to partner with the brand to provide newness to the consumer to drive the market growth. Talking about agility and trends. Let's turn to a very familiar slide, which demonstrates the power of our sports fashion model and our agility in navigating trends. Looking at footwear, the way we build our range is by category. We take running, performance and retro, basketball, football with the terrace, tennis with Classics, skates and other. You can see the movement between the category. For example, running has grown significantly over the past two years and moved back above the 50% mark where it was in 2020, supported by the development of performance running. Thanks to our agility, to our flexible merchandising to our buying excellence, we are navigating, anticipating the product cycle, the change of trend and the evolution of brand heat. This is critical in the context of the evolving brand and product cycle. Turning to apparel. You can see how we have moved our offer towards performance apparel and street fashion. It shows again our agility to capture and create growth by extending our reach with performance, where we have delivered more than 5x growth over the last five years. Same for the street fashion that show our ability to extend to new category to respond to customer trends, including through the development of our own brand. Our apparel strategy is key as it creates a competitive advantage in every market we operate, and it brings to life our unique lifestyle proposition. Coming to our key five priorities. The first one is to diversify our proposition to deliver the latest and greatest product for our customer. The JD customer, the young customer, the 16, 24 years old customer, they are in sports, music, fashion, culture through the eyes and ears of our industry-leading buyers and merchandiser and thousands of young store colleagues across the globe, we know our customer incredibly well. This, combined with our strong brand relationship, allow us to feed in and exchange insights to create the best possible assortment and bring it to life in the theater of our store. We also work with our brand partner to create our powerful exclusive product set, which we supplement with our own brand. Those own brands allow us to bring new products to market faster at attractive price points. Our exclusive and own brand product make us 50% of our apparel sales and 30% of our footwear sales. We are leveraging those key strengths to diversify into more trends; more style and more category. Here are some examples. So, if you take fashion, you will see here brands like Timberland, Birkenstock, UGG, Havaianas. For all those brands, we are the #1 wholesaler account for them and trends like denim, knitwear and quarter zip. If you take performance, this is where we have Nike Vomero, Adidas Evo, HOKA, ON, ASICS, and brands we help bring to market like Montirex was nothing created by two guys in Liverpool and now been in all our store and AYBL, the same for women. If you take Street, this is where we have Air Max 95, you may have seen the Li Tao campaign, Adidas Superstar, New Balance 9060, brands like Hoodrich, Von Dutch, which are exclusive to us and our own brands, Supply & Demand and Unlike Humans. And if you take outdoor with North Face, Arc'teryx, we are the only mass market retailer having Arc'teryx, Salomon, Rab and Colombia. And the exclusive, all those products are exclusive to us. We are all, we develop exclusive products, delivering more style, more technical feature, more colorway. And we are open to business. So, if you like any of this product, I recommend you to go to one of our stores today. They are open, and the JD team is today modeling some of them today for you. So, to summarize, we are bringing more brands, more style and more trends in performance, athletic, leisure and streetwear. There is no limit to what we can offer to our customer. We are widening our product range to ensure we are the #1 choice for them. To give a concrete example, our team identified nine months ago, the boots being a trend for your young customer. We have worked with Timberland to rejuvenate the yellow boots and create exclusive product. Now we are working to bring back from Nike archive a boot. We have tested trends in size and foot patrol. We sold out very quickly, and we are now working for JD to produce a product for the second half of the year. This is the way we create and scale new products for the market. Another focus is to elevate women range across footwear and apparel to bring more appeals for the female customer where JD has a low market share. To do this, we are leveraging core insight. We are increasing our apparel penetration in North America and Europe, where we see a significant opportunity from the current level. And we are working with our brand partner to enhance our product storytelling to better engage with our customer. We did recently through the campaign We Run This City, focus on performance running. And you know our customer is the epic runner, not the sweaty runner. So today, we are accessing all product category of our major brand partner, performance, lifestyle, we access all. And it is for us to create this offer to deliver the best for our customer. Second key strategic initiative is driving store productivity and optimization of our store estate. Our net store movement last year was a reduction of 39 stores, demonstrating our fewer, bigger and better store strategy. First, optimizing. In North America, we will leverage group best practice to optimize EBIT store footprint and profitability. As part of this, we will close around 170 underperforming EBIT store over the next three years. In Europe, we are focusing on our key markets. We will, therefore, restructure our operation in Eastern Europe and in Germany. And in the U.K., we are streamlining our outdoor business with less fascia and a better online business following the successful implementation of Shopify. All these actions will ensure our investments are concentrate where we can scale when we have scale, productivity and return are strongest. Second, converting. This year, we are converting City Gear store to DTLR and Shoe Palace, following last year very successful trials and accelerating the conversion of our stand-alone Finish Line store to JD. Both conversion program have so far delivered a strong uplift in sales and great return on investment. Third, fewer, bigger and better store to serve our customer better and to be more productive. In JD U.K., last year, we saw a net reduction of 24 stores, but a 4% increase in overall selling spreads. Let's bring it to life with this short video. [Presentation] I'm pleased to say that Trafford, which is a store that you have seen, is today the biggest multi-brand sports fashion store in the world by sales, not by size, but by sales. So, a big well done to the team. The first key strategic priority is completing our global e-commerce re-platforming. This has been my biggest frustration in the last three years. Our e-commerce platform built in-house was not fit for purpose, with major deficiency. The priority has been to secure by investing in cybersecurity and putting in place the IT general control foundation that didn't exist in the business. Meanwhile, we have invested in cloud-based technology with a best-of-breed strategy and upgrade our legacy system. With now a solid foundation and the right team in place, led by Jetan, we make significant progress. Last year, we rolled out our new online platform in North America, Southeast Asia and Italy, allowing us to expand ship from store and click and collect capability. We are very pleased with the results. We have seen a double-digit percentage increase in online sales. Building on this momentum, this year, we will continue to roll out our new online platform. We have done Ireland last week. We will do U.K. in the coming months and in Europe to complete our re-platforming projects. Thanks to the composable architecture of the new technology, we are now able to build and release new technology products and feature much faster, enabling us to move forward with marketplace, which we don't have, loyalty, which we didn't been able, the consumer was not able to get redeem points on our loyalty scheme, AI and payment offering. Fourth, we are accelerating AI adoption with a dual focus on driving growth and improving our operational effectiveness with a test and learn mentality and a decentralized and organic approach. We believe there is a huge opportunity to drive growth through better merchandising decisions, the right product at the right place, more personalization and helping our customers find the right product, for example, through Agentic LLMs, chatbot shopping, assistant or sizing prompts on our website. At the same time, we are improving our operations through better inventory management, scale marketing content. We can duplicate our marketing content in an infinite way, improve customer care and central efficiency. While still in the infancy stage, we have seen some strong early results. Let me give you a couple of case studies to demonstrate our focus. First, JD has completed a three-month trial of the AI chatbot shopping assistant, Ask JD, in the U.K. The chatbot tailors our customer shopping experience and helps them find the product they want faster. Customers are able to ask the assistant for suggestion on latest trends, details regarding specific products and creating head-to-toe looks. Early results have been promising with over 300,000, sorry, customer interaction and conversion increased by up to 5x. We will continue to test and learn and iterate with new feature. Ask JD will also be launched in the U.S. soon. Under the operational effectiveness pillar, JD has implemented an AI-driven customer care chat and voice tool, enabling the faster 24/7 support for JD customer. All customer service call now start their journey with the voice AI with 40% handled entirely by the agent. This is allowing our customer service colleagues to focus on more complex issue while reducing the cost per service by around 30%. As you know, from our announcement earlier this year, we are a first mover on Agentic commerce, which is highly relevant for the JD customer. As you watch a following demonstration, you will notice the customer experience is not fully end-to-end, and that's deliberate. What this demo highlights is the earlier part, what this demo should highlight is the earlier part of the customer journey, discoverability. Now it's highlighted. Despite the prong being about a product, not a retailer, JD has consistently mentioned it, both in the narrative response and in the product recommendation generated by ChatGPT. Let me be clear on a few points. First, not everything you've seen is unique to JD. The in-browser processing experience you see here is an OpenAI capability that can be enabled across many websites today. However, our ranking, our visibility and the frequency with which JD appears over competitor is very much a direct outcome of the advancement we have made in generating engine optimization over recent months. Second, the more optimized brand experience you see, the demo particularly across the first group of brands are a direct result of the re-platforming work we have prioritized over the last year. We have now the foundation and the foundation will now pay off. This is just the beginning. Our partnership with Commercetools will enable instant checkout, which we expect to go live soon in the U.S. Taken together, this is how we move from discovery to consideration to conversion, not just keeping pace with our customers shop, but shaping how they will shop in the future. Our fifth and final strategic initiative is taking loyalty and data-driven personalization to the next level. In the year, we continue to scale our established global loyalty program, JD STATUS. The program now has almost 10 million active members globally, who generate between 33% to 40% of sales across our region. In the U.K., the Retail Royalty Index ranked JD STATUS within the top 10 of loyalty program in all retail sector. One of the key distinctive feature of our proposition is JD Cash, which customers earn on each of the purchase. We see very strong return on this with over GBP 7 spend at JD for every GBP 1 of JD Cash. This year, we will focus on leveraging the data lake, it provides us with personalization through targeted offer, a personalized access to new product release, gamification and competition. This drive a virtuous circle. The more we personalize, the more engaged our customer, the more data we have, the more we can personalize and so on. The output of our strategy initiative is to drive a better customer proposition, so better sales, a better productivity of our space and people and so better profitability. In North America, we will continue to focus on growing brand awareness of our JD Fashion through store opening and conversion, backed by a targeted marketing. We are continuing to increase our apparel penetration. Meanwhile, we are leveraging the EBIT acquisition to reduce our support function costs. Altogether, we see a clear opportunity for North America margin to move higher in the medium term. In Europe, as you saw earlier, we have refined our market focus. We are taking appropriate action on the store footprint. As we scale automation, our L&DC will drive lower cost per unit and unlock savings on duties as we continue to move away from replenishment via the U.K. Building on the success we have seen elsewhere, we will roll out our new online platform across Europe this year. With this support from this action and natural operating leverage, there is a significant opportunity for the European margin to move higher over the medium term. Finally, in the U.K., our focus is to be more productive with our space and to optimize our central overheads. We will also implement our new online platform later this year to regain online market share. And we are focused on deepening our customer relationship through loyalty and personalization. Over the medium term, we expect the U.K. operating margin to remain stable at the current level. This brings me to our group medium-term financial priorities. Put simply, we intend to grow sales ahead of our market, driven by organic sales growth with a contribution from net new space of 2% to 3% points. Deliver operating margin progression driven by Europe and North America, as I outlined. This will be supported by our cost efficiency program as well as cost leverage. And finally, generate strong cash flow and deliver attractive shareholder return. Within this, our gross CapEx will stabilize around 3% to 3.5% of our total sales per annum with disciplined working capital management, which will support our new cumulative three years free cash flow target of over GBP 1.4 billion on three years. To conclude, our customer-first approach, combined with tight cost and capital control deliver a resilient performance for JD against what was a tough trading environment. Our economic model is generating significant free cash flow, and we expect to deliver attractive shareholder return through increased dividend and share buyback. To finish, our FY '27 guidance is centered on controlling the controllable. We are focusing on maintaining our cost and cash discipline while building a global customer-focused business with the right infrastructure and governance. Before I hand over for our Q&A session, I'd like to thank all my colleagues for their hard work and dedication. Their commitment and their agility are moving us forward, forever forward. Thank you. Over to you.

Thank you very much. All right. We'll now move to questions. No loud music, please, to protect my delicate ears. So we're going to go to questions now. We're going to alternate between left and right. State your name and institution. Don, can we go with Richard on the front row, please?

I've got 2 questions to kick us off, if that's all right, one on apparel, one on Finish Line. Apparel, I think last year, the organic sales were up about 5%, but the weighting moved down slightly. And I just wondered if you can talk about how you see that weighting moving going forward by geography. I think at the moment, it's around half. Is that right in the U.K., but I guess probably underpenetrated outside the U.K. That's the first one. And then Finish Line, I wondered if you can just give a bit more color on how you see that store portfolio evolving over the next sort of 3 years or so. I think you're talking about 80 to 90 conversions in the coming year. But what are the sort of plans for the rest of the estate?

Yes. So apparel, you're right, did well, plus 5%. The weighting is diluted by the acquisition of Courir where there is no apparel. So that's the reason. So, if you take the like-for-like weighting, it's going up. So, it's just a matter of the acquisition of Courir where apparel is a very limited part of that. But we are really happy with the performance in apparel and continue to do well. I think footwear is where it is more challenging.

And just on the geography point, in the U.K., actually more than 50% is apparel. And I think that shows the diversity of our business. In Europe, it varies depending on the country, but broadly around 30%, some higher, some lower, such as Courir, for example. And North America is less than 20%. So I think that's where there's a real opportunity. And as Régis said, Courir clearly has a lower, is more footwear focused. Hibbett is also more footwear focused. So I think that's also taken it back a little bit in the U.S. But with those now in the base, the opportunity to grow the penetration across the board is absolutely there. So on the like-for-like, we continue to increase penetration.

So on Finish Line, as you know, Finish Line, we finished the year with 170 stores. What we are doing is that we continue to convert. So in three years' time, there should be no Finish Line stores. We will keep the Macy's business, which is under the Finish Line banner, but we will have no more Finish Line stores. It's just the time to do the right things in terms of conversion. We don't want to convert with, most of the conversion now is with an extension or a better location in the mall. So, it depends on that. And the other part is that in the U.S., you have some malls that are really dying, but we do a good business. So that's why the like-for-like is down because those malls are, but for the moment, all those stores are profitable. So we will close them when they start to be a problem, but that's why we are taking our time. But that's why I think we should focus the like-for-like excluding the Finish Line stores, which are, by definition, going down. As a matter of time, there will be no more Finish Line stores. So in two years' time, we should have no more Finish Line standalone stores.

Anne Critchlow here. I've got three questions, please. First, if you could give us an idea of the number of net closures overall for the year? And then second, I'm just wondering if there's some tension between your aim to invest in the stores, but also the free cash flow target. So, are parts of the business pushing you to spend more perhaps? And then thirdly, on marketplace, are you working with a partner there?

Okay. Dominic, you do the first one. I will do the 2 others.

Yes. In terms of, you talk about last year or the year to come?

Year to come.

So in terms of, last year, as you saw, we closed 39 stores overall. It's probably easier just to give a view by geography. In terms of our move in the U.K., we expect to see probably around 20 stores closed in the U.K. in the coming year. But as we said last year, space-wise, we'll probably stay at least the same or increase as we move that. We will see the beginning of the closure of the stores in North America with Hibbett, 175 stores probably over around 3 years. So if you assume an average spread over a period of time. If we then go to expansions in North America, around 20 new JD stores and probably 70 to 80 Finish Line to JD conversions. So that will give you a flavor of the mix in North America. And then in Europe, probably around even by the time we think about what we're doing around JD plus closures in Germany and Eastern Europe, probably a net negative overall. I won't give you a precise number because sometimes you work through the plans, the timing may be a bit different, but stay broadly flat for the year.

So, concerning your question on free cash flow, no, there is no tension. I think we have increased a lot of investment. And that's the reason why profit is down, net EBITDA is up, because of the investment we have made, especially with IFRS. You get the first part of your investment very penalizing a lot your profit. And I think what I always learned from my finance background is that cash is king. And when you see the level of cash, it means that the business is doing well. And I think these investments we have done are the right investments. The business was underinvested mostly in terms of infrastructure, but even in stores in the U.K., where we have an older store fleet, we didn't invest. So we are able to deliver this free cash flow without putting any constraint on the openings because today, we want to keep our discipline, which has always been the same and which is a 3-year payback. And today, in a market which is muted, there are not a lot of opportunities to open a lot of stores. So we adapt to that. So, there is really no constraint in terms of investing in the business. And I would like everyone to really understand these key numbers. If you compare to 2022, our profit is down GBP 100 million. Our EBITDA, old-fashioned, is up GBP 200 million. It shows really the quality of the work and the investments we have made in this business. And I think we should be judged on this one because that shows the underlying strength of the business. On your question around marketplace, our technology didn't offer us the ability to do that. We are late. The new technology we have implemented, commercetools, will help us to be able to do marketplace. For the moment, we have a partnership with Mirakl around that, but that can be flexible. But definitely, this is my biggest frustration for the last 3 years. Every time I was asking for something, the platform cannot do that. So that's why we had spent a lot of time. We have lost ground. And I think that in the U.K., we have lost market share online because our platform was not good. In the past, we moved our digital business easily because we were the only ones to access product. Now the access to product, it's less scarce in terms of ability to access product, and the quality of the website makes a big difference. And our website is not good. We need to say it. It will change. In July, we are implementing the new platform, and we will start to reinvest in our proposition online around marketplace, but even our loyalty program. You cannot redeem your points, your JD Cash, on e-commerce. There's plenty of limitations we have today on omnichannel that will be slowly but surely removed, and we can now really do a much better job and catch up on online business.

Let's move over to the side. Can we go to Kate, please, on the third row.

First question is just on the group gross margin. You made a comment about higher marketing contributions as a percentage of sales, adding, I think, about 0.3 percentage points of sales. Is this due to a more supportive Nike, and how sustainable are those higher marketing contributions? My second question is just on the guidance for FY '27. You're guiding effectively for another year of profit decline. Can you give some more detail on your expectations by regions in terms of what's up, what's down? And then my final question is just on Finish Line X Macy's. Is that unprofitable? And if so, how much of a drag is from the U.S. or North America, should I say?

I will take the first one and second and Dominic will complement the first one and the second one. I'll start with the last one. The Macy's business is a very profitable business for us. So, it's a very good business. So that's why we will continue. And it's a different customer target, more female, a little bit older customer, and we are targeting a different offer, but that's a great business that we have there. But it's, so it is my answer is on Finish Line Macy's. So, this business is a very profitable business and a very good business, and it's under the name of Finish Line. You have a Finish Line stand-alone store, which is a different business, which was my first answer. So that's the difference between the two. Gross margin, it reflects more support from all brands. So, it's not Nike related. It's all brands. I think that in a world where you need to create demand, you need to connect with the consumer, brands are investing more and they are investing with us because they see and this is really interesting. You have seen the success of the Molly-Mae partnership with Adidas. Is the brand understand now more and more that the go-to-market strategy should be more exclusive, more with a key partner, and we are getting more of that where we launch product together, we get marketing support to do that together. So it's not a relation to Nike. It's a relation with all the brands. Dominic?

And just on that point, it's neutral to the bottom line because effectively, it's compensating us for costs that we spend. So, what you're seeing here is just the disaggregation and grossing up between OpEx and gross margin. In the past, we'll have had this. It's just that it's the way it's worked through in the year, and it will vary a little bit from year-to-year. So, I think the thing to focus on gross margin is a 30 basis points price investment that we've made as being the real underlying trend of what's happening with gross margin. In terms of the profit guidance for the year, the overall group profit margin will go down, obviously, as you say, because we're expecting to see profit go down during the year. When you look at where the market is, as we explained on the slide, we expect North America to be more resilient. And therefore, I would expect less pressure in North America, particularly if we start to see some of the benefits of the synergies coming through. We've made good progress on those, and there's more to go to. I think we'll see more pressure in the short term in the U.K. just because of the market pressures that we're seeing there. And in Europe, we'll have pressure because the market is challenging, as we said in the slide, but the actions we're taking around Heerlen, around the store portfolio, around e-commerce platforms going in and leverage should start to help offset that a little bit. So that will give you a little bit of the dynamics of what we're seeing in the various key markets.

We'll move to the next question. Nothing on this side. Clive, please on the third row.

Clive Black from Shore Capital, who feels very old wearing a tie, I have to say. And my mental health has been stressed as a Coventry City support seeing Aston Villa in your video. Two questions. First of all, Reg, you've talked about youth unemployment in the past, I've been worried about it. How do you see trends across your geographies in that 16 to 24 age group? And then on your guidance, what are you assuming to deliver 750 this year? What are the factors that would take you to the lower end of that range across the group, please?

I will take the first one, and Dominic will take the second one. What we've seen is that you know the numbers better than I do. But I think long term, the good news is that the demography will help because long term, we should see unemployment going down because of the evolution of the population. But short term, especially in U.K., the increase of the NI has been really a key factor in retail investing in technology to replace people. All the 10, 20 hours checkout. Now you go to M&S, you cannot find someone at the tier. It's even the large deal are now self-checkout. So that has been and you have seen that in the last 12, 18 months, a big development of self-checkout, which is our customer was doing 20, 20 hours in that job. So, we see the unemployment for you going up a lot in U.K., which explains, it's very interesting. We get the data from Circana, which is market data. And if you take the sneaker market, the sneaker market is flat. And the part which is reducing is the 14, 18 years old, which is exactly those customers that will have a 10 hours contract. With this contract, they were able to buy a pair of sneaker that the parents didn't want to pay because it was seen as something and they don't have anymore. And that's why it's putting, I think, pressure, especially in U.K. In Europe, a little bit less because as you know, Europe is much more protective on all those things, but we see a little bit the same and less so in the U.S. So that's where we see. So that's really, for me, as you mentioned, is a key KPI I'm looking at because that's the one that makes a difference for us is unemployment because the first one that lost their job or don't get the 10, 20 hours contract is a youth customer. And we see that's why the way we have guided, which is to come to your point and to do the introduction to Dominic is that, we see U.K. as the worst because of the employment of the youth. Europe being a little bit the same. And the other thing that happened in Europe and U.K. is that the consumer is half empty, whereas the U.S. customer is the most resilient. They always are full and the unemployment is in a better shape. So that's really what we're seeing.

And on the guidance point, in setting the guidance, we really evolved from what we said at the trading statement in January. We didn't give formal guidance then, but we talked about muted market growth. And over the medium term, we see this as a 2% to 3% market growth sector. Muted is probably more like 0% to 1% growth. We'd expect to slightly outperform that 2% to 3% space growth would then point to negative like-for-like, and that's where the market is at the moment, and I think no surprise in the current environment. There are other puts and takes in terms of new space and significantly offsetting OpEx inflation, and we do expect to see some pressure on margin continuing at the same level. Going to the bottom end of the GBP 750 million, what would need to be the case? I think probably most likely at the sales line. So, an assumption around where that like-for-like would sit in the period. But at the bottom end, we're probably in an environment where there's probably a bit more promotion on in the market because people are struggling a bit more and possibly some more inflation. So difficult to be precise, but I think it's just us being pragmatic as we were in November coming to the peak season to say this is an uncertain period. So, let's just give ourselves some more headroom. And I think probably a derisk on like-for-like is the most likely way to get there.

Over to JP and Warwick, please.

Jonathan Pritchard at Peel Hunt. Just on apparel, I think the received wisdom over the years has been that apparel runs a higher margin gross margin than footwear. Is that still the case? And is it hundreds of basis points? Is it tens of basis points? Or are they pretty much the same now? Just to build on Anne's question, the other side of it really, the U.K. real estate market, is there the availability of sites? I mean, obviously, not as big as Trafford commonly, but is there a strong pipeline of space to get to that bigger and better mantra? And then just interested in that, Dominic, what you're saying on the sales bridge about the like-for-like definition. Could you just give us a bit more color on that?

Intake margin on apparel is higher than footwear. Exit margin is the same. So there has never been a big difference. So it varied by season and all that stuff because it depends on, to make it simple, it's the same. So I think that it has been the same for the last 3 years. So there is no big difference between the two. In terms of U.K., we have Trafford, we have Blue Water. There is still some stores that we want to expand and to create this theater. So that is around, I would say, 5 projects per year in the coming 3 years, that type of magnitude. And on the like-for-like? Yes.

I pulled that out simply because people benchmark us against others, particularly in our sector. Our like-for-like definition follows the majority of what retailers do, which is that our like-for-like is our core European retail well, most retailers. our like-for-like is our core estate and where we have new stores, where we stand by more than 10%, where we relocate in the market, we treat all of that as new space. And as you saw in the results, 2.1% organic, 4.2% new space, giving you minus 2%, 2.1% like-for-like. Some of our competitors, our very largest competitor in North America, treat effectively relocation and expansion as like-for-like investment in their existing store estate. If we apply those numbers to our measures, we'd be minus 0.6% like-for-like for last year. So, it's just giving you a comparison that when you look at different businesses, they use different measures and therefore, direct comparison isn't always giving you the answer that you might expect.

And to give you, and that's why we insist on U.K. especially because to give you a concrete example, if you take Trafford, Trafford is driving, is not in our like-for-like. But the impact that we have around the store because we drive so many sales is in our like-for-like. So, in a certain we're opening bigger store is driving a negative like-for-like, whereas if you take one of our competitor, main competitor, it will put everything in the like-for-like. So that's where it's a very different way of measuring. The same in U.S., some of the conversion is not in the like-for-like. So when we do expansion, which in the case, it will be. But the more practical example is Trafford. Trafford has a very negative impact on our like-for-like, whereas it's a big success.

Just before we go to Warwick, if anyone's got any questions on technology and AI, Jeff I am, Jetan is ready for you. He is hungry.

Warwick Okines from BNP Paribas. Sorry, actually not on tech. I've got two. You said that the apparel mix is a bit less than 20% in North America. Could you specifically say what it is for the JD banner and where it, how much it increased last year, please? And secondly, the most buoyant footwear category, it seems is performance running for you. Is there enough innovation in the pipeline for that to keep that the strongest segment in footwear?

On the first point, it's just above 20% actually for JD, and it's grown by probably about 2 percentage points in the last year. So we're seeing steady growth there, but this takes time to build. So it's not going to be a sudden change.

And don't forget U.S., you have a lot of in the South, it will never be the U.K. one because in U.K., you sell jacket, which is a much higher price point that you don't sell in half of the U.S., you sell only shorts and T-shirts. So there is a price.

And a good example of that is JD Canada is about 30% apparel penetration because of the price point of the jacket area.

On running, I think the biggest growth is not performance. In fact, it's retro running. So it's not performance running play a role, but it's not significant compared to the growth that we are experimenting in retro running. So it's not linked to the performance running so much.

Charles, please.

Charles Allen from Bloomberg Intelligence. I think sort of just looking at the numbers you've given with space growth and negative like-for-likes, one has to assume that your sales densities are down a little bit, and you did talk about deleveraging. I mean, is that right? And do you need to start getting your sales densities up to start getting the margin effect that you're talking about?

Sales density going down a little bit, but because we are closing some small stores, which are with a high sales density, but not very profitable because of the productivity. So, you have the two elements. It's the sales density and the productivity. The problem of our small store is that you need someone to open, you need someone to close. So, when sales is going down a little bit, you have no leverage, whereas with a larger store, you have leverage because you can invest in technology and all that staff. So yes, you're right in terms of sales density, but in terms of staff density, it's going up.

Productivity in store, Sales per employee is going up.

That's the balance. And you get larger stores. And when you get larger store, your cost per square meter is lower than you have small stores. So, you get that.

Just double check, are there any questions on the telephone lines at this point? No. Okay. I think we've got a few more on this slide.

Jean Roach from Schroders. Can I have three, sorry. So, one is on trends in shrinkage across the three main regions. Then the vintage effect, I was being told that this was having no effect about a year ago. I do feel that must have ramped up now and if you're able to measure it. And then, yes, I will ask one on technology and AI. How close are you to having shoppers directly being linked into your websites by the likes of Claude or GPT? Or is that still not happening?

Take the last one, I take the other two.

Shrinkage I mean JD shrinkage as a group is incredibly good, less than 0.1% and that does reflect an average. It's better in some markets than others, but in all markets, less than 1%. And we've seen it steady in U.K., Europe and actually improving in North America, which is, I think, a testament to the methods that we use to protect our stores.

So, in terms of shoppers being linked into the app itself or into our commerce, what you saw today in the demo was essentially a web view. It takes you to our product page in that respect. And then that commerce journey actually maps back into our commerce channel. In terms of customers linking into the app, our Hibbett trade has actually gone live with a Hibbett store within the ChatGPT app. That's a test that we're running at the moment as a first stature within the group. We've been live for a month, early days, and we'll see how that plays out in the coming weeks.

And Vinted, I think that is definitely happening on apparel. On footwear, the penetration is very, very low because unfortunately or fortunately, the young customer when they were sneaker for a significant period of time, the smell stay. And I'm sure if you have a teenager, you will understand what I'm saying by that. So, it's really very minimum what they do on the sneaker side. On apparel, it's more important. But most of that is to buy new products. So, they just renew the product cycle. So, we are not, our apparel sales are up. So definitely, we don't see an impact. And I think on sneaker, we are protected by the smell.

Thierry Cota from Bank of America. Three questions, please. You haven't mentioned the World Cup. I was wondering whether you could measure the impact be on a net basis, excluding cannibalization, if that's possible and by region, Europe versus the U.S. Secondly, on Finish Line, it seems that when you give the numbers of like-for-like with the effect of Finish Line conversion without it, the gap has been shrinking. So I was wondering if you could elaborate on the number of stores and how much exactly is left to do? And if it's basically a function of fewer stores being converted or less efficiency in doing so? And a very small question, U.S. tariffs, you're paying some tariffs for the products which are under your banner into the U.S. So how much you paid last year? And with the tariffs being halved, is that going to be a few million saved starting in the latter part of the year?

Okay. So, World Cup, I think what we measure in World Cup is Replica, which is tiny on the total sales. So there is no, that's a direct impact. There is a positive impact about talking about sport, about the soccer or the football culture in the U.S., which is a more midterm, long term. But I know you like numbers, but you cannot capture a number linked, the only numbers we can capture is Replica and Replica is what, GBP 30 million business or it's not at the size of the group, it's very marginal. You have a positive impact about, we were born in Manchester and Liverpool North of U.K. based on the football culture. That's what we have exported across Europe. and that's what we have exported in the U.S. The U.S., it's more a basketball culture. Football culture is less. So, the fact that football culture become more important in the U.S. will have a positive impact because that's a culture that we know very well that we are able to leverage. But that's a midterm. So, there is no direct impact. We don't sell football boots or very marginally in the U.K. So there is no direct impact. Don't forget, we are a sports fashion retailer. We are not a sports retailer. So, there's no direct impact. Yes, that's GBP 30 million. It's GBP 30 million. So yes, but we do 13 billion. So, if you want to go in micro detail, we can go, but I don't think it's significant.

So Finish line? Finish line, I mean the reason it's representing a smaller proportion of the difference is because it's becoming a smaller state. So, at the beginning of FY '26, we had about 260 Finish Line stores. Last year, we closed 14, transferred 69 to JD. So, we finished this year with 175. We'll probably transfer around 80 to 90 this year. So we expect to finish around sort of 80, 90 stores at the end of this financial year. And as Régis said earlier on, really, we won't talk about them because they are less than 4% of our 2,500 stores in North America, and we will be opportunistic about when we close them because some of them are still making contribution or close them when it makes economic sense to do so. So the reason is just it's getting a smaller proportion of the total store base in North America.

And on the U.S. tariff, as we said last year, we have no direct impact of the U.S. tariff or very limited. We mentioned last year 8 million. So that's the type of magnitude. And it was mainly around our CapEx because it's a fixture and fitting that we are buying. As you know, we are buying our product from the brand, and the brand is covering the tariff or getting the benefit. So it's more a question for Adidas and Nike and not for us.

Caroline Gulliver from Equity Development. Just to build on Jean's question, could you just talk a little bit more about the latest trends you're seeing by region in sort of the customer journey online for your young customers? Obviously, the 16- to 24-year-olds with regard to social media marketing and then how you're linking kind of TikTok and the app and the ChatGPT and all the rest of it for all these in the room.

Do you want to take that? Okay. Great.

You are the youngest.

I'll cite some of the demonstrations you've seen today hopefully answer that question. So Ask JD is a great example. Really, it's driven an AI experience where the customer can really probe and act and enhance that customer journey through the life cycle of the digital ecosystem. We started off in a very measured test and learn approach. We actually injected that product feature in the product listing page first. And what we saw was low uptake and driving only 1% conversion on that page onto the next kind of size of the customer journey. When we move that then to the product display page, we saw with the 300,000 sort of customers that Régis mentioned on the sample size, we saw high uptake of 5x conversion into the basket. So, what we're seeing is in the micro moments of the customer journey, we are infusing AI where it makes sense. And we really taking a customer-led approach, very much a measurement-led approach to make sure it makes sense. This isn't really about injecting AI everywhere. It's about making sure it adds value to the experience and also it converts and it makes economic sense. On TikTok, I think you mentioned early stages of kind of looking at that channel. Obviously, that channel has a different economic model. It has a different need state, but it's also where our customer lives, and we engage highly with the customer on that social media channel. At the moment, we're exploring with partners the opportunity to transact, what that means in terms of the proposition we serve there and the price point and the experience. I think that's the 2 questions. Is there one more? Or does that kind of answer the question?

One more Kate, I think. Dom, if you could pass the mic to her.

I'll come back with another tech question as well because I had a bit of a shopping experience two weeks ago. So, you're due to complete your global e-com update in the U.K. and Europe this year, how quickly will the shopping experience actually change for the consumer? Because obviously, the systems aren't very joined up at the moment. So will you sort of be able to get next day click and collect, for example, are we going to have your loyalty program on the same app as your JD app, et cetera. So, what would the experience for the consumer be overnight sort of thing?

Yes. I think there's multiple strands in that question, so I'll kind of answer piece by piece. I think the first thing is when we talk about the website, yes, it is a new website, but there is a whole raft of change that we're doing underneath that. So, it's a composable architecture. So what do we mean by that?

Just first, the website in U.K. will be changed in July, July, August.

It will change in July in that respect. But it's powered with a new search and merchandising platform. It's powered with a new content platform. It's powered with a new order management system in that respect. In terms of the customer experience, what it does unlock is more of an omnichannel offering. So, it allows the ability to drive the customer promise of Click & Collect further up the funnel in that respect. So, you can start seeing availability of stock in the product listing pages. You have the options to do quick same-day pickup or Click & Collect, as you mentioned, it will have loyalty injected in it, so you can start to burn and earn online. And there's new sort of product features that we want to deploy as part of that launch. So, it's more fewer clicks to basket. It's better site speed. It's more scalable in that respect. So, you'll see more features being launched. This is not about replacing one platform from another and driving parity. It's elevating that experience.

And you're right, it's not great today.

On the app, it's similar as well. So, I think you mentioned the app will also be elevated with the new app. It coincides with every market launch that we do. So, we launched Italy and Ireland. We upgrade the app capability with new features. We will see the same play out in the app experience in U.K. in the summer. Okay.

I think that's with our Q&A concluded. I think we can thank you all very much for joining us today. Thanks very much for the JD management team. See you soon.