JD Sports Navigates Consumer Headwinds, Anticipates Lower End of Profit Expectations

JD Sports Fashion plc (LON: JD.) delivered a solid Q3 trading statement but tempered its full-year outlook, citing weaker macroeconomic and consumer indicators.

The sportswear retailer highlighted its focus on operating and financial discipline amidst a challenging market backdrop. Markets are reacting cautiously to the news, anticipating potential volatility in the near term.

Total Q3 sales, including acquisitions, grew by 8.1% at constant FX rates, while like-for-like sales decreased by 1.7%. For the nine months ended November 1, total sales increased by 15.7% at constant FX rates, with a like-for-like decrease of 2.2%. While these figures show overall growth, the slowdown in like-for-like sales is a key concern for markets.

Regionally, performance varied. North America saw a like-for-like sales decline of 1.7%, although organic sales grew by 3.0%. Excluding Finish Line, North America's like-for-like sales decline was a more modest 0.2%. Europe experienced a like-for-like sales decrease of 1.1% but organic growth of 4.0%.

The UK showed a like-for-like decrease of 3.3% with organic sales down 2.0%. Asia Pacific was the strongest region, with like-for-like sales up 3.9% and organic sales growth of 13.3%.

Gross margin for the Group in Q3 was 40bps lower year-over-year (YoY), or 30bps lower excluding acquisitions. The dip is attributed to controlled price investments in the online offer. The company continues to manage inventory levels effectively, positioning it well for the peak trading period.

Driver Breakdown:

• Strategic Progress: Successful launch of automation at the Heerlen distribution center for JD Europe store replenishment.
• E-commerce Expansion: Roll-out of new e-commerce platform in Europe (now live in Italy) following successful launches in North America and APAC.
• Cost Control: Costs and cash are being well-managed, with US integration synergies starting to materialize.

Régis Schultz, CEO of JD Sports Fashion plc, stated, “We are navigating a year of volatility in external factors with disciplined execution, reflected in a solid Q3. In the near term, as we enter an important trading period, we are mindful of recent weak macro and consumer indicators in our key markets. These lead us to take a pragmatic approach for our FY26 profit outturn.”

The company is actively managing its cost base and focusing on strategic initiatives, including e-commerce platform upgrades and supply chain optimization. These efforts are aimed at mitigating the impact of external pressures and positioning the company for long-term growth.

The company is on track to generate strong free cash flow and complete £200 million of share buybacks in FY26, signaling confidence in its financial position and commitment to shareholder returns. This buyback program may provide some support to the share price amidst the current uncertainty.