JD Sports Fashion (LSE:JD.), the sportswear and athleisure retailer, saw its shares drop 15% on Thursday after it told investors that it now expects full-year profit before tax and adjusting items of £700m to £800m, down from its previous £750m to £850m guidance.
The downgrade follows a second quarter to 1 August in which group organic sales fell 1.3%, worsening from a 0.1% decline in the first quarter, while like-for-like sales dropped 3.1% against a 2.5% fall in Q1.
North America drove the deterioration, with organic sales down 4.5% and like-for-like sales down 6.8%, as weaker core consumer sentiment combined with a slower quarter for high-heat footwear product and back-to-school demand deferred into August. Excluding standalone Finish Line stores, North American organic sales fell a more modest 1.0%. Europe's organic sales slipped 0.4%, cushioned by resilient Sporting Goods trading in Iberia, Greece and Cyprus, while the UK improved to a 0.8% like-for-like gain, helped by strong football replica kit sales and a better Outdoor performance. Asia Pacific stood out with 10.2% organic growth.
"Trading in the second quarter remained tough... North America saw the most acute impact," said chief executive Régis Schultz.
The group held a net cash position as of 1 August, versus net debt a year earlier, and began the second £100m tranche of its £200m annual share buyback on 3 August. Free cash flow guidance remains unchanged at £460m to £520m. Further detail follows at half-year results on 23 September.
David Hughes, analyst at Shore Capital, described the quarter as disappointing, with accelerating sales declines particularly in footwear and North America, prompting forecast revisions across the board.
The broker, in a note, kept a Hold rating and a 75p target (current price: 79.5p), noting that the relative market valuation, the retailer's cash generation, debt-free status and the ongoing £200m buyback are key supports to underpin the price.
Hughes, meanwhile, trimmed PBT forecasts by around 9–10% yet still sees "attractive" 2027 multiples, and a c.13.8% FCF yield on the maintained target.
Elsewhere, Hargreaves Lansdown equity analyst Aarin Chiekrie added that the group is shifting from expansion to squeezing more efficiency and returns from its existing store base following recent acquisitions, and that the World Cup lifted UK/Europe replica kit sales but did not translate into stronger North American demand.
News Intelligence what this means for the company
JD Sports cut full-year profit guidance to £700m–£800m from £750m–£850m after Q2 like-for-like sales fell 3.1%, driven by a sharp 6.8% decline in North America where consumer sentiment weakened and back-to-school demand shifted into August. The downgrade narrows the midpoint by £25m (2.9%) and reflects a worsening trend: Q2 organic sales fell 1.3% versus Q1's 0.1% decline, signalling momentum is deteriorating rather than stabilising. Deutsche Bank had expected guidance to hold unchanged as recently as 14 August; this revision breaks that expectation.
The profit cut and accelerating sales weakness in the group's largest region (North America, ~38% of FY26 sales) undermine the case for near-term earnings recovery. Free cash flow guidance remains at £460m–£520m, but profit downside of up to £50m at the range midpoint raises questions about whether the three-year >£1.4bn FCF target (FY26–FY28) remains achievable without operational or capital discipline shifts to be detailed at half-year results on 23 September.
Insights assembled by AI. Editor-reviewed and grounded in tickstock’s coverage and proprietary knowledge graph.
Content is for informational purposes only, not financial advice.
