Key Takeaways:
JD Sports cut its full-year profit forecast to £700-800 million after second-quarter like-for-like sales fell 3.1 percent, led by a 6.8 percent drop in North America.
"Our guidance reflects a pragmatic view of external market conditions," CEO Regis Schultz said, adding the company remains confident in its long-term strategy.
The FTSE 100-listed retailer, which generates over a third of sales in North America, said like-for-like sales fell 3.1 percent in the 13 weeks to Aug. 1, deepening from a 2.5 percent decline in the first quarter. North America dropped 6.8 percent and Europe fell 2.7 percent, while the UK rose 0.8 percent and Asia Pacific gained 1.4 percent. The company cited weaker consumer sentiment, a slow quarter for high-heat footwear products, and back-to-school demand shifting from July into early August.
The revised range compares with £852 million in profit before tax and adjusting items for 2025/26 and a consensus estimate of £781 million. Shares have lost about a quarter of their value over two years as Nike, which accounts for more than 40 percent of group sales, resets its product cycle.
JD said the footwear category remained soft across the group, given consumer pressure and what it called "ongoing product cycle evolution" across key brand partners. The company also flagged a "highly promotional" market that may persist into the second half, which could pressure gross margins as discounting deepens. Apparel and accessories performed well in all regions.
On an organic basis, group like-for-like sales fell 1.3 percent in the quarter and 0.7 percent in the first half. Revenue declined 2.8 percent on a like-for-like basis in the first half.
Bernstein analysts said JD's US sales in the second quarter fell short of expectations, partly due to weak performance at the Finish Line chain. UK sales improved slightly, while Europe remained weak but slightly better than expected, they noted. The footwear sector remains "weak," Bernstein said, and the downward revision to earnings forecasts implies a 4 percent cut versus the mid-point consensus.
The company maintained its free cash flow target of £460-520 million for the year, supported by cost and capital discipline. Schultz said the UK had a good quarter with strong sales of football kit replicas and improved performance in the Outdoor segment.
The guidance cut reflects management's expectation that promotional pressure and soft footwear demand will persist through the second half. Investors will watch whether Nike's product reset delivers new launches in the coming quarters to restore full-price selling, and whether JD's core younger, less affluent customer base regains spending power as cost-of-living pressures ease.
This article is for informational purposes only and does not constitute investment advice.
