JD Sports (LSE:JD.) has warned that profits could decline further in the coming financial year as weak consumer spending, difficult footwear market conditions and wider geopolitical uncertainty continue to weigh on trading.
The retailer forecast profit before tax and adjusting items (PBTAI) of between £750 million and £850 million for fiscal 2027. The upper end of the range would only broadly match the £852 million reported for the year ended January 2026, which itself represented a 6.4% decline on the previous year at constant currency.
Management said the wide guidance range reflects ongoing uncertainty surrounding consumer demand, industry trading conditions and the broader macroeconomic environment.
Management remains cautious on short-term market conditions
Chief Executive Régis Schultz said the company remains focused on operational discipline while preparing for continued subdued market growth in the near term.
He added that although current consumer and industry indicators remain challenging, management continues to hold a more positive view of the group’s medium-term growth prospects.
Revenue growth driven by acquisitions despite weaker like-for-like sales
For the financial year just completed, total sales increased 11.7% at constant currency to £12.66 billion. However, excluding contributions from the acquisitions of Hibbett and Courir, underlying organic growth was a more modest 2.1%.
Group like-for-like sales declined 2.1%, reflecting softer trading conditions across several regions and categories.
Gross margin remained stable at 47%, as controlled pricing investments — particularly within online channels — were balanced by increased marketing support from major brand partners.
Margins pressured despite stronger cash flow
Operating profit before adjusting items declined 5.4% to £886 million, while operating margin narrowed by 120 basis points to 7.0%. The company attributed the decline to inflationary cost pressures and weaker like-for-like sales performance.
Despite the earnings pressure, free cash flow rose 36% to £462 million, supported by tighter capital discipline and lower capital expenditure, which fell to £401 million from £515 million in the previous year.
JD Sports ended the period with net cash before lease liabilities of £311 million, a significant improvement from £52 million a year earlier. The group expects free cash flow for FY27 to range between £460 million and £520 million.
North America improves while UK remains challenging
North America, now JD Sports’ largest market accounting for 38% of total sales, recorded a 1.8% decline in like-for-like sales over the full year. However, trading improved progressively throughout the year, with positive like-for-like growth achieved during the fourth-quarter peak trading period.
The UK delivered the weakest performance, with organic sales falling 2.5% and like-for-like sales down 3.9%, impacted by softer footwear demand and weaker online trading.
Asia Pacific was the strongest-performing region, generating organic growth of 8.5% alongside improving like-for-like sales momentum toward the end of the year.
More about JD Sports
JD Sports Fashion plc is a UK-based international sportswear retailer operating stores and digital platforms across multiple global markets. The company specialises in branded athletic footwear, apparel and accessories, partnering with major sportswear brands while expanding through acquisitions and international growth initiatives across Europe, North America and Asia Pacific.
Leave a Reply