JD Sports share price fell 10.5% in early trading after the retailer cut full-year adjusted pre-tax profit guidance to £700mn-£800mn. Second-quarter organic sales also declined 1.3% to £3.1bn, leaving shareholders with a weaker profit path and a softer read on trading into the second half.
£750mn-£850mn was the previous guidance range, so the new target trims both ends by £50mn. The middle of the range now sits at £750mn, compared with £800mn before, a £50mn step down that tracks the weaker sales base.
North America and the UK
35% of total sales comes from North America, JD Sports’ largest region, so weakness there matters more than in a smaller market. Asia Pacific delivered double-digit growth, but it was not enough to offset declines in the UK, Europe and North America.
4,800 stores across 51 different countries give the group scale, but scale has not insulated the core customer base. JD Sports’ shoppers are typically 16-24, and that age group has been under cost-of-living pressure while intense discounting has weighed on performance.
£100mn Buyback Completed
£100mn of the £200mn share buyback programme has already been completed, leaving the other half still to run. Free cash flow guidance stayed at £460mn-£520mn, which means the company is keeping its cash plan intact even as it trims profit expectations.
£700mn-£800mn is now the range investors have to price in, and elevated promotional activity is expected to continue over the second half. How much of the downgrade reflects margin pressure versus weaker sales volume is not explained, so the next read-through will come from whether trading improves enough to protect the new profit target.
