JD Sports Fashion backs lowered outlook amid "tough" trading backdrop

JD Sports Fashion PLC on Wednesday said headwinds seen in the first half of the financial year are likely to persist as it reported lower sales and reduced margin.

The Bury, Manchester-based sports retailer reported pretax profit of £241 million for the 26 weeks ended August 1, up 75% from £138 million a year earlier.

But pretax profit before adjusting items fell 20% to £282 million from £351 million, just ahead of £279 million company compiled consensus.

Adjusted items fell to £41 million from £213 million on-year, primarily reflecting the movement in present value of put and call options.

Sales edged down 0.7% to £5.90 billion from £5.94 billion. Organic sales declined 0.7% at constant currency while like-for-like basis sales fell 2.8%.

Gross margin slipped to 46.8% from 47.0%, below market expectations of 47.5%. This was

driven principally by "controlled price investments" predominantly online to "retain engagement and conversion in a highly promotional trading environment, partially offset by higher marketing contributions."

Basic earnings per share ballooned to 3.45 pence from 0.80 pence, but fell 14% to 3.97p from 4.60p on an adjusted basis.

Free cash outflows totalled £18 million, lowered from £68 million a year ago. JD said this is "consistent" with the usual seasonality of the business, with working capital outflows in the middle of the financial year, normalising around the year-end.

As of August 1, JD said it had net cash (before lease liabilities) of £168 million compared to net debt of £125 million the year prior.

The dividend was increased 21% to 0.40p per share from 0.33p.

JD Sports called it a "resilient" performance against a "challenging backdrop of consumer cost-of-living pressures, footwear product cycle headwinds and a highly promotional market."

The company said a good performance in apparel and accessories, up 4% on-year, was offset by softer footwear, down 3% on-year.

Looking ahead, JD Sports left financial 2027 guidance unchanged from the reduced outlook outlined in August.

The company continues to expect pretax profit before adjusting items of £700 million to £800 million and free cash flow of £460 million to £520 million.

In the 52 weeks to January 31, 2026, JD Sports reported pretax profit before adjusting items of £852 million and free cash flow of £462 million.

"We continue to believe that the markets in which we operate are positioned for average annual medium-term growth of 2-3%. In the near term, however, a number of the headwinds seen in HY27 may persist into H2: a weaker spending environment for our core customer demographic, ongoing product cycle evolution in footwear at some of our major brand partners, and a promotional market backdrop," the firm said.

Chief Executive Regis Schultz said: "While the trading environment remains tough, I am encouraged by the progress we are making and confident in our strategic execution."

Shares on JD Sports, which rose 6.4% on Tuesday ahead of the results, were down 0.5% at 78.30p each in London on Wednesday morning.

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