Shares of JD Sports Fashion plc, the Bury-based FTSE 100 retailer, fell another 4% after it published half-year results and said “a number of the headwinds shaping HY27 may persist into H2.”

The Bury company said first-half group revenue slipped 0.7% to £5.899 billion and profit before tax and adjusting items fell 19.7% to £282 million. Interim dividend for share was raised 21.2% to 0.40p.

JD Sports CEO Régis Schultz wrote in his outlook: “As discussed in our Q2 trading statement in August, and reiterated today, a number of the headwinds shaping HY27 may persist into H2.

“We therefore continue to expect full year profit before tax and adjusting items of £700m to £800m and free cash flow of £460m to £520m.

“Our focus is on executing the priorities within our control: completing the roll-out of our new technology platforms, scaling AI and loyalty capabilities, driving higher store productivity across all fascias, and maintaining tight cost and capital discipline.”

Shares of JD Sports Fashion are down about 15% for the past year and roughly 66% for the past five years.

Schultz added: “Our Group organic sales were -0.7% for the half, a resilient performance against a challenging backdrop of consumer cost-of-living pressures, footwear product cycle headwinds and a highly promotional market. We remained focused on ‘controlling the controllables’ – progressing our strategy at pace while maintaining tight cost and capital discipline.

“We achieved several strategic milestones in the period. We continued to broaden our product proposition, with apparel and accessories growing to 36% of group sales, alongside strong momentum in performance-based running and newer footwear styles.

“New e-commerce platforms went live in the UK and Ireland, and online sales grew to 20% of group sales. JD STATUS surpassed 10m active loyalty customers globally, and we became one of the first retailers in the US to enable purchase and checkout directly within an AI platform. We also initiated a reorganisation of our store portfolio in Eastern Europe and have now completed our restructuring programme in Germany.

“We ended the half with net cash of £168m, an improvement of nearly £300m year-on-year after returning £260m to shareholders through buybacks and dividends over the last 12 months.

“Our FY27 guidance is unchanged from our Q2 trading statement: profit before tax and adjusting items of £700m to £800m and free cash flow of £460m to £520m, reflecting our focus on working capital efficiency and inventory management.

“While the trading environment remains tough, I am encouraged by the progress we are making and confident in our strategic execution. My thanks go to all our colleagues worldwide for their continued hard work and focus.”

REACTION: Victoria Scholar, Head of Investment, interactive investor:

“The company struck a cautious tone highlighting a tough trading environment with near-term headwinds such as the ongoing geopolitical and macro volatility.

“Its consumer backdrop has been challenging with cost-of-living pressures hampering demand. Plus the company is being forced to engage in greater promotional activity to stimulate demand, but this weighs on margins. Its key market North America has been struggling with a 4% drop in like-for-like sales amid a softer consumer leading to lower spending on premium trainers, purchase delays and a disappointing footwear product cycle. While JD Sports has no direct exposure to the Middle East, it is dealing with second-round effects from inflation that is hurting its core target market.

“The struggles at Nike also have a knock-on effect on JD Sports as one of its most significant brand partners. The sportswear giant has fallen out of fashion amid fickle consumers who no longer see Nike products as highly desirable. Preferences have shifted towards newer, more exciting, nimble brands like On and Hoka hurting the longstanding market leaders.

“The silver lining in today’s report is that JD Sports refrained from cutting guidance after last month’s weak trading update when it issued a profit warning. This has helped to provide shares with a boost at the open. Nonetheless the company remains in a tough spot with no signs that the macro headwinds are subsiding and shares remain in the red year-to-date.”