JD Sports Maintains Profit Outlook But Anticipates ‘Muted Market Growth in FY27’

JD Sports Fashion plc (LON: JD.) has released its Q4 2025/26 trading update, revealing a resilient performance amidst a challenging consumer backdrop.

The company anticipates full-year profit to align with current market expectations.

Group organic sales grew by 1.4% in Q4, while like-for-like (LFL) sales saw a decrease of 1.8%, consistent with the previous quarter's decline of 1.7%. Regionally, North America showed improvement, offsetting weaker trends in Europe and the UK.

Revenue details include:

• North America: Q4 LFL sales +1.5%, Organic +5.3%
• Europe: Q4 LFL sales -3.4%, Organic +0.9%
• UK: Q4 LFL sales -5.3%, Organic -4.8%
• Asia Pacific: Q4 LFL sales +2.8%, Organic +9.6%

The company expects its FY26 gross margin to be approximately 50bps lower year-over-year, primarily due to controlled price investments, particularly in the online sector. These investments were made to maintain competitiveness and support sales volumes amidst fluctuating consumer demand.

JD Sports is actively managing costs and cash flow, with US integration synergies continuing to materialize. The company is on track to generate free cash flow of approximately £400 million in FY26 and has already completed £200 million in share buybacks.

Driver Breakdown

• North American Strength: Improved LFL sales driven by strong Black Friday performance and successful product launches.
• Strategic Investments: Controlled price investments, especially online, to maintain competitiveness.
• Operational Efficiency: Strong cost and cash control, with synergies from US integration.

AskTraders Takeaway

The market's reaction to this news will likely focus on JD Sports' ability to maintain profitability in a difficult retail environment. The improved performance in North America is a positive sign, but investors will be watching closely to see if the company can reverse the negative trends in Europe and the UK.

Régis Schultz, CEO of JD Sports Fashion plc, stated that overall sales during the peak period were in line with expectations, against a volatile consumer backdrop and they responded decisively in the final weeks of the period by choosing to make targeted price investments, demonstrating the strong customer appeal of JD in a challenging market.

While maintaining its FY26 profit guidance, JD Sports anticipates muted market growth in FY27, citing a weak spending outlook among its core demographic and the early stages of innovation pipelines from major brand partners.

The company plans to accelerate initiatives across marketing, digital, and AI to strengthen its customer proposition and outperform the market.