JD Sports Fashion lowers profit outlook amid North America struggles

Shares in JD Sports Fashion PLC slumped on Thursday after the sports retailer cut full-year profit guidance amid worse-than-expected US sales as footwear and 'back-to-school' demand flagged.

Lancashire-based JD Sports now expects financial 2027 pretax profit before adjusting items of £700 million to £800 million, lowered from £750 million to £850 million previously.

At the mid-point of guidance, this would be down 12% from £852 million posted in the 52 weeks to January 31, 2026.

JD Sports said the guidance cut reflects underlying first half sales trends and the promotional market backdrop, which may persist into the second half of the financial year.

Chief Executive Regis Schultz said trading in the second quarter "remained tough", and that guidance "reflects a pragmatic view of external market conditions."

"The market stayed highly promotional, reflecting the consumer and footwear product cycle headwinds our industry has faced in recent quarters, whilst our core consumer was impacted by incremental cost-of-living pressures," he said.

In response, shares in JD Sports slumped 14% to 80.74 pence each in London on Thursday morning, the worst-performing stock on the FTSE 100, which was down 0.3%.

JD Sports said group sales were £3.09 billion in the 13 weeks to August 1, down 1.3% on an organic basis versus Visible Alpha consensus, which forecast growth of 0.5%.

Like-for-like sales declined 3.1%, worse than the 2.0% drop projected by VA consensus.

Performance was hit by a weaker-than-forecast performance in North America, although the UK surprised to the upside.

In North America, sales were £1.07 billion, down 4.5% on an organic basis and 6.8% lower LFL, with the latter much worse than the 0.6% decline forecast by VA consensus.

Sales performance in North America reflected "weaker core consumer sentiment, a slower quarter for high-heat footwear product, and deferred 'back-to-school' demand from July into the first half of August," the firm said.

UK LFL sales rose 0.8%, ahead of VA consensus, which predicted a 2.9% decline. Organic sales here edged 0.2% lower.

JD Sports said UK sales were driven by apparel and accessories, including strong football replica kit sales.

In Europe, organic sales ebbed 0.4%, and like-for-like sales fell 2.7%. In Asia Pacific, organic sales jumped 10%, and like-for-like sales rose 1.4%.

For the first half, organic sales fell 0.7%, and like-for-like sales declined 2.8%.

The company said first-half trading "also reflected incremental cost-of-living pressures on our core consumer from continued inflation (including higher fuel prices), as well as ongoing product cycle evolution in footwear at some of our major brand partners...both of which proved more acute than expected in North America."

Free cash flow guidance of £460 million to £520 million was maintained compared to £462 million reported in the prior financial year.

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