Shares of Bury-based FTSE 100 retailer JD Sports Fashion plc rose as much as 12% as it published a fourth quarter trading update for the 13 weeks to February 1, 2025, initial guidance for the new financial year (FY26) — and announced plans to launch an initial £100 million share buyback programme.
On FY25, JD Sports reported organic revenue growth of 5.8% and profit before tax and adjusting items outturn in line with January 2025 guidance range of £915 million to £935 million.
On FY26, JD Sports said trading to the end of March has been in line with its expectations, adding: ” … while we currently expect profit before tax and adjusting items to be in line with consensus expectations, our FY26 guidance excludes any potential impact from changes to tariffs …”
Current consensus expectation for FY26 profit before tax and adjusting items is £920 million with a range of £878 million to £982 million.
In a separate announcement, JD Sports also updated on its “medium-term plans” saying: “As we are now moving into a lower phase of capital investment with no material M&A opportunities in the pipeline … we are in a position to provide incremental shareholder returns.
“In line with this, the board intends to announce the commencement of an initial £100m share buyback programme.”
On FY26 guidance, JD Sports said: “We expect the trading environment in our key markets to be volatile throughout the year and we have started the year in line with our expectations.
“We note the proposed changes to tariffs announced last week. At this stage, the outcome of these developments is uncertain. We are in regular dialogue with our brand partners but it is too early to comment on the potential sector impact.
“Total revenue in FY26 will grow due to the impact of the acquisitions made during FY25, which will add c.10% in FY26, and through the contribution from new space of c.4%.
“We anticipate c.150 new stores and c.100 conversions/relocations in the year. There will also be c.50 closures, mainly in Eastern Europe. We anticipate LFL revenues will be below FY25.
“We have additional operating expenses in the year, outside of normal inflationary increases, including UK labour costs and a higher proportion of IT investment falling into operating expenditure as opposed to capital expenditure.
“Offsetting these increases partially will be cost savings and scale efficiencies across our key markets, and integration synergies in North America following the Hibbett acquisition.
“Accordingly, while we expect FY26 Profit before tax and adjusting items to be in line with current consensus expectations, our FY26 guidance excludes any potential impact from changes to tariffs.
“Capital expenditure will be c.£500m. We anticipate net cash before lease liabilities on our balance sheet at the year end, including the intended £100m share buyback programme.”
In the company’s “medium-term plans” CEO Régis Schultz said: “We have made significant strategic progress over the last two years: we have accelerated the growth of the JD brand, particularly in North America and Europe; we have continued building a global sports fashion powerhouse through the acquisitions of Hibbett and Courir, taking full ownership of ISRG in Iberia and MIG in Eastern Europe, and disposing of around 30 non-core businesses; we have upgraded our global supply chain; and we have built the required infrastructure and governance for a group of our scale.
“Reflecting slower market growth and the investments we have made in our supply chain and infrastructure, we are updating our medium-term plans to capitalise on our organic growth opportunities in North America and Europe, deliver productivity and efficiency benefits from the investments and utilise our strong cash generation to deliver improved returns for our shareholders.”
On its “medium-term plans” the company said of its capital allocation priorities: “We will invest to capitalise on our growth opportunities across North America and Europe, and maintain our disciplined approach on store investment to deliver a three-year payback.
“As we come to the end of our significant investment in our supply chain and infrastructure, we expect capital expenditure to trend from c.5% of revenue to 3-3.5% over the medium term …
“Ensure we can meet future commitments. Reflecting the important role the Mersho family continues to play in the integration, development and long-term growth of our North American business, we have agreed to defer the buyout of their 20% non-controlling interest in Genesis, the parent company of our North American business, to two tranches of 10% each in 2029 and 2030 …
“Pay a progressive dividend …
“Using surplus cash to improve returns. We anticipate generating material surplus cash after those commitments. This cash can be applied to increasing investment in the Group, M&A or to providing incremental returns to shareholders.”