Shares of JD Sports Fashion plc, the Bury-based FTSE 100 retailer, rose as much as 4% after it published a second quarter trading statement and announced a new £100 million share buyback “reflecting confidence in medium-term industry growth, our ongoing market share gains and focused execution.”
JD Sports said its like-for-like (LFL) sales declined by 3.0% in the second quarter and that full-year underlying pre-tax profits are expected to be around £885 million.
The firm reported: “Improved LFL sales trend for Q2 in North America; Europe & UK affected by tough prior year comparatives due to Euro 2024 tournament …
“Expect to be in line with current market expectations for FY26 profit before tax and adjusting items (PBTAI), albeit we continue to assess potential impacts from US tariffs …”
JD Sports CEO Régis Schultz said: “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. I am proud of all our teams across the globe for their energy and focus against tough trading conditions.
“For Q2, in North America we saw an improved performance following the deferral of several product launches from Q1, along with stronger sales trends in apparel and online. In both Europe and the UK, we were annualising tough comparators from the Euros football tournament last year, but still saw a good underlying performance in apparel and from newer footwear lines.
“Across our regions and fascias, in general we see a resilient consumer, albeit very selective on their purchases. We therefore remain cautious on the trading environment going into H2. For our FY26 profit before tax and adjusting items we expect to be in line with current market expectations, before any indirect impact of US tariffs which we continue to work through.
“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.
“Reflecting this, we are reaffirming our commitment to enhanced shareholder returns, and announcing today a new £100m share buyback following the successful completion of the first £100m programme last month.”
REACTION:
Aarin Chiekrie, equity analyst, Hargreaves Lansdown: “JD Sports investors breathed a sigh of relief as second-quarter numbers landed in line with market expectations, with group like-for-like sales down 3.0%. This was helped by America delivering a better-than-expected performance, despite the ongoing tariff-related uncertainty.
“Europe and especially the UK remain a drag on performance though, with like-for-like sales at the latter down 6.1%. This was driven by a tough comparative period, where last year’s sales were given a foot up due to the men’s 2024 Euro’s.
“Looking further out, the shift in focus from expansion to squeezing the most out of its existing store footprint is a welcome one. This should help to strengthen the balance sheet and provide more wiggle room for shareholder payouts – including a new £100mn share buyback announced today.
“With the share price having fallen by more than a third over the past year, the recent challenges and market softness now look well priced in. Trading at just 7.5 times next year’s earnings, the valuation offers plenty of downside protection. And if investors are patient enough to ride out some uncertainty over the next couple of years, it could prove to be a very attractive entry point.”
Victoria Scholar, Head of Investment, interactive investor: “JD Sports reported second quarter like-for-like sales down 3%, following a 2% drop in the first quarter. It faced tough year-on-year comparables in the UK and Europe after a strong period in 2024 when the men’s Euros 2024 tournament supercharged sales.
“Sales in North America, which account for 36% of Q2 revenue, dropped by 2.3% but this was an improvement on the previous quarter partly thanks to the deferral of several product launches. JD Sports said there was a good performance in apparel, but footwear was softer. CEO Regis Schultz said ‘we remain cautious on the trading environment going into H2’.
“Encouragingly, the company said it doesn’t see any material direct impact of US tariffs, but it is monitoring indirect impacts and the everchanging tariff landscape by keeping in close contact with brand partners.
“Trade uncertainty, pressure on consumer finances, rising unemployment and struggles at Nike are among the headwinds facing JD Sports. Nonetheless, in the face of an unpleasant cocktail of pressures, JD Sports has managed to deliver a pickup in its US market with an improving sales trajectory which provides a source of optimism for investors.
“Shares are reflecting this glimmer of hope this morning with the stock jumping around 4% to the top of the FTSE 100, helping to reverse some of the losses over the last year. While shares have struggled over a one-year period shedding more than a third, they have been performing better lately with an encouraging uptrend over the past six months.”