Full Breakdown
JD Sports’ First-Half Profit Drops Near 20% as North American Sales Weaken, Yet Guidance Remains Intact
By Drooid · · How we work
Core Event: Profit Decline and Sales Slippage
JD Sports Fashion reported a 19.7% fall in adjusted pre-tax profit to £282 million for the first half of its fiscal year, down from £351 million a year earlier. Underlying profit fell by the same amount, while group revenue slipped 0.7% to £5.9 billion in the 26 weeks to 1 August. Like-for-like (LFL) sales declined 2.8% overall, driven primarily by a 4% LFL drop in the North American market, which accounts for 38% of total sales.
Background and Recent Performance
The FTSE 100 retailer, often dubbed the “King of Trainers,” entered the period with a growth plan focused on expanding its own-brand capability and international footprint. Earlier in the year, the company cut its full-year profit forecast by £50 million, but retained a target of £700 million to £800 million for underlying pre-tax profit. The North American slowdown was attributed to weaker consumer sentiment amid broader cost-of-living pressures and delayed back-to-school demand.
Financial Results and Sales Breakdown
- Geography: North America LFL sales – -4%; Europe LFL sales – -3.3%; United Kingdom LFL sales – -1.4%; Asia-Pacific LFL sales – +3%.
- Product categories: Footwear, the largest segment, fell roughly 3% as the group cited a shift in the global footwear product cycle and fewer major brand launches. Apparel and accessories, now 36% of sales, grew around 4% according to one source and 3.8% according to another, offsetting the footwear decline. Online sales rose 5% (or 5.2% on an organic basis) and now represent about 20% of total sales.
- Margins and cash: Gross margin edged down as the retailer invested in pricing to stay competitive in a highly promotional market. The balance sheet improved to £168 million of net cash, reversing a net-debt position from the prior year. The interim dividend was raised 21%, and a £200 million share-buyback programme continues.
Official Statements from Management
Chief Executive Régis Schultz acknowledged the “cost-of-living pressures” and “highly promotional market” but described the performance as “resilient” given the challenging backdrop. The company also confirmed its plan to debut in Mexico, targeting more than 140 stores through a local franchise partner, describing the market as “large, highly engaged” and aligned with JD’s demographic profile.
Verbatim Quotes
- “We think they're doing absolutely the right things,” — Dominic Platt, Financial Officer, Theindustry
- “It is just a matter of time. This is a big business and big businesses don't turn round in six months.” — Yanmei Tang, Third Bridge
What's Next: International Expansion and Outlook
JD Sports will launch its Mexican franchise operation beginning in 2027, with more than 140 stores slated to open under the Grupo Axo partnership. The retailer remains on track to meet its full-year adjusted pre-tax profit guidance of £700 million to £800 million, contingent on continued recovery in its core markets and the successful rollout of its international growth strategy.