JD Sports Shares Rally Despite Mixed Q2 Performance

JD Sports Fashion plc (LON:JD) shares rose more than 4% in early Wednesday trading as the company announced a new £100 million share buyback program, signaling confidence in its medium-term growth prospects, even as it reported a mixed performance in its Q2 2025/26 trading statement.

The move aims to enhance shareholder returns, following the completion of a previous £100 million buyback.

Revenue: The headline figures reveal a complex picture. Group like-for-like sales decreased by 3.0% in Q2, but organic sales grew by 2.2%. For the first half of the year, like-for-like sales were down 2.5%, while organic sales increased by 2.6%.

North America saw a like-for-like sales decline of 2.3% in Q2 but a positive organic growth of 4.8%. Europe experienced a smaller like-for-like dip of 1.1% with a stronger organic growth of 5.4%. The UK faced the steepest like-for-like decline at 6.1%, with organic sales also contracting by 4.5%. Asia Pacific showed a slight like-for-like increase of 0.3% and a robust organic growth of 9.3%.

Profit & Margins: The company expects to be in line with current market expectations for FY26 profit before tax and adjusting items (PBTAI), despite ongoing assessments of potential impacts from US tariffs.

Gross margin for the first half of the year, excluding recent acquisitions, was 40 basis points lower year-over-year, primarily due to controlled price investments in the online offer.

Cash & Balance Sheet: JD Sports completed a refinancing of its debt facilities, securing a new 5-year £1 billion multi-bank revolving credit facility and a $700 million term loan. Strong free cash flow underpins the new share buyback program.

The decision to initiate a further share buyback is said to reflect a strategic allocation of capital, indicating management's belief that the current share price undervalues the company's future potential.

CEO Régis Schultz stated, “We are making strong progress in developing our omnichannel customer proposition, store footprint and supply chain, and we are controlling our costs and cash effectively.”

“We are well placed to continue growing our market share in the key growth regions of North America and Europe, and confident about the medium-term growth prospects for our industry.”

Looking ahead, JD said it remains cautious about overall trading conditions in H2, given “the continued strains on consumer finances, unemployment risk, and the ongoing shift in the footwear product cycle.”

Regarding tariffs, JD explained that it does not consider the direct impacts of US tariffs on JD to be material.

“On indirect impacts, we continue to monitor the ever-changing landscape on tariffs, keeping in close contact with our brand partners on how they are addressing the situation,” the company stated.