JD Sports Fashion (LSE:JD.) told the market on Thursday that full-year profit before tax and adjusting items would come in at £700m to £800m, down from the £750m to £850m range set out only months earlier.
The shares fell 15% on the announcement, a reaction that took the stock toward the bottom of its 52-week range of 63.98p to 106.181p; they later stood at 75.6p.
The downgrade followed a second quarter to 1 August in which group organic sales fell 1.3%, worse than the 0.1% decline recorded in the first quarter, and like-for-like sales dropped 3.1% against a 2.5% fall previously.
North America carried the weight of the deterioration, with organic sales down 4.5% and like-for-like sales down 6.8% in the region.
Why it matters
North America now accounts for roughly 38% of group sales, according to Shore Capital, which makes a regional slowdown there a group-level problem rather than a peripheral one.
Management attributed the weakness to softer core consumer sentiment combined with a slower high-heat footwear cycle and back-to-school demand that shifted later into August rather than disappearing outright.
Excluding standalone Finish Line stores, North American organic sales fell a more modest 1.0%, a distinction that separates a broader consumer pullback from something specific to that recently acquired chain.
Chief executive Régis Schultz said trading in the second quarter "remained tough" and that "North America saw the most acute impact," language that leaves open whether the deterioration is cyclical timing or something more structural.
About the company
JD Sports Fashion is a UK-headquartered multi-brand retailer and wholesaler of sports, athleisure and fashion footwear, apparel and accessories, operating branded and own-label stores alongside e-commerce platforms across Europe and North America, with North America now its largest market.
The group's operational priorities include completing UK and Europe re-platforming to a new global e-commerce system, continuing automation at distribution centres such as Heerlen, and further investment in AI and personalisation aimed at online growth and margin. It held a net cash position as of 1 August, a reversal from net debt a year earlier, and reiterated a three-year free cash flow target above £1.4bn across FY26 to FY28.
How it got here
JD Sports entered its current financial year from a position of relative strength.
In May, the group set FY27 profit and cash guidance off the back of what was described as a resilient FY26, with Schultz saying the group remained "confident in JD Group's medium-term trajectory, underpinned by our strong brand partnerships and agile, multi-brand model."
That confidence carried a 20% proposed uplift in the ordinary dividend and a new £200m rolling annual buyback.
Through the summer the tone stayed constructive. Coverage in mid-August still had analysts expecting like-for-like sales to improve despite a difficult sector backdrop, with Deutsche Bank flagging only a limited near-term lift from World Cup football jersey sales and warning about excess inventory rather than outright decline.
A week before that, the company had installed Peter Agnefjäll as its new chair, a governance change made against a backdrop that still looked broadly stable.
Thursday's update reversed that narrative inside a fortnight. The guidance cut to £700m-£800m, delivered alongside confirmation that Q2 organic sales had fallen 1.3% and like-for-like sales 3.1%, marked a clear acceleration from the softer but still-positive commentary analysts had been working with only days before.
Market view
Shore Capital's David Hughes called the quarter disappointing, pointing to accelerating sales declines concentrated in footwear and North America that prompted forecast revisions across the sector.
The broker trimmed its PBT forecasts by around 9-10% but kept a Hold rating, moving its target to 75p against a share price then around 79.5p, citing relative valuation, ongoing cash generation, the group's debt-free status and the continuation of the £200m buyback as offsetting supports.
Hughes also estimated a free cash flow yield of roughly 13.8% on the FY27 numbers underpinning that target, describing the 2027 valuation multiples as "attractive."
Deutsche Bank's most recent note, issued before the downgrade, had reiterated a Hold rating with a 95p target against a 93.4p close, flagging industry-wide concerns over excess inventory and a shift toward performance products over lifestyle lines, alongside risk that JD could turn more cautious on the second half if wholesale allocations tightened.
What's ahead
JD Sports began the second £100m tranche of its £200m annual rolling share buyback on 3 August, a continuation of the capital return programme that brokers have repeatedly cited as a counterweight to the trading disappointment.
Half-year results are due on 23 September, when management is expected to provide further detail on the guidance cut.
That update will be watched for evidence on whether the shift of back-to-school demand into August and the slower high-heat footwear cycle prove to be timing effects rather than a deeper change in US athleisure spending.
The wrap
JD Sports has cut its profit guidance for the second time this year, with the deterioration traced squarely to North America and a consumer that spent later and less than expected through the summer; brokers have trimmed forecasts and held their ratings rather than their targets, and the half-year results on 23 September stand as the next point at which the company will have to show whether this quarter's weakness was a delay or a direction.
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