JD Sports Fashion PLC (LSE:JD.) has lowered its profit expectations for FY27 after challenging second-quarter trading, with weaker consumer demand and pressure on footwear sales particularly affecting its North American business.
The sportswear retailer now expects profit before tax and adjusting items of between £700 million and £800 million, compared with its previous guidance of £750 million to £850 million. Despite the reduction in its earnings outlook, JD maintained its free cash flow forecast of £460 million to £520 million.
Group organic sales declined 1.3% during the 13 weeks ended 1 August, deteriorating from the 0.1% fall recorded in the first quarter. Like-for-like sales were down 3.1% during the period.
North America was the main source of weakness, with the region representing approximately 35% of group sales during the quarter. Organic sales fell 4.5%, while like-for-like revenue declined 6.8%.
JD attributed the performance to softer consumer confidence, weaker demand for some of the most sought-after footwear products and a shift in back-to-school spending, with some purchases moving from July into August.
Trading proved more resilient in the UK. Organic sales edged 0.2% lower, but like-for-like sales increased 0.8%, supported by stronger demand for apparel and accessories, football replica kits and an improvement within the group’s Outdoor operations.
European performance was softer, with organic sales declining 0.4% and like-for-like sales falling 2.7%. Asia Pacific delivered the strongest regional growth, recording a 10.2% increase in organic sales and a 1.4% rise on a like-for-like basis.
Chief executive Régis Schultz described trading conditions as “tough”, pointing to elevated promotional activity, continuing cost-of-living pressures and headwinds associated with the footwear product cycle.
Despite the weaker sales backdrop, JD said inventory levels remained under control and first-half gross margin was consistent with expectations. The company was also in a net cash position before lease liabilities as of 1 August.
JD has additionally begun the second £100 million tranche of its previously announced £200 million share buyback programme, providing further capital returns to shareholders despite the more cautious profit outlook.
More about JD Sports Fashion PLC
JD Sports Fashion PLC is a global retailer specialising in sports fashion, footwear and apparel, operating through a portfolio of retail brands and stores across the UK, Europe, North America and Asia Pacific.
The group sells products from major international sportswear brands alongside its own retail propositions, giving it significant exposure to trends in athletic footwear, sports-inspired fashion and casual clothing.
North America has become an increasingly important part of the group following its international expansion, while its established UK operations and growing businesses across Europe and Asia Pacific provide geographic diversification.
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