Shares in JD Sports rally after trading update nods to strong performance in Europe
Shares in Bury-headquartered athleisure giant JD Sports Fashion bounced back as the retailer said there would be no more downgrades to profits and revenues grew by 5.6% in the fourth quarter.
JD expects to make between £915m and £935 million profit.
However, like most businesses, the company still doesn’t know what to expect from the Trump tariffs announced last week, then rescinded last night.
“At this stage, the outcome of these developments is uncertain. We are in regular dialogue with our brand partners but it is too early to comment on the potential sector impact,” the company said in a statement.
Overall, trading is expected to be “volatile” throughout the year, the company said, but has made several attempts to give confidence to shareholders who have seen stocks tumble to a low of 61.2p this year.
Afternoon trading saw the shares close at 71p.
To reassure and placate shareholders JD has launched a share £100m buyback programme, starting immediately and running until the end of July 2025.
At a briefing to analysts yesterday afternoon (9 April 2025), and on a media round led by chairman Andy Higginson the company pointed to a stronger performance in Europe and Asia.
Group like-for-like sales rose overall by 0.3% for the year, fell 2.5% in the UK, while Europe and Asia Pacific were up 11.4%.
In a bid to encourage investors to take a strategic view of JD’s prospects, Régis Schultz, CEO of JD Sports Fashion Plc, delivered to analysts a medium-term plan update highlighting the changes he has made since to took over from Peter Cowgill: “JD operates within an attractive, long-term growth market and we are well positioned to continue growing market share. We have strong brand partner relationships and an agile, multi-brand model which allows us to drive, and respond quickly to, market trends. We are highly cash generative and disciplined in terms of our capital allocation opportunities.”
“We have made significant strategic progress over the last two years: we have accelerated the growth of the JD brand, particularly in North America and Europe; we have continued building a global sports fashion powerhouse through the acquisitions of Hibbett and Courir, taking full ownership of ISRG in Iberia and MIG in Eastern Europe, and disposing of around 30 non-core businesses; we have upgraded our global supply chain; and we have built the required infrastructure and governance for a group of our scale.
“Reflecting slower market growth and the investments we have made in our supply chain and infrastructure, we are updating our medium-term plans to capitalise on our organic growth opportunities in North America and Europe, deliver productivity and efficiency benefits from the investments and utilise our strong cash generation to deliver improved returns for our shareholders.”
Analyst reaction has been positive.
Dan Coatsworth at AJ Bell said: “JD Sports had a spring in its step after surprising the market with a positive trading statement that showed life hasn’t got any worse for the retailer. The purveyor of much bad news over the past year or so due to a more fragile consumer backdrop, JD has now found its feet. Whether it can stay standing remains to be seen.
“The elephant in the room is tariffs as JD sources a lot of products from China and the US is a key growth engine for the business. If prices shoot up across America, consumers will be watching every penny and JD could suffer big time. The market doesn’t seem to be worried at the moment, preferring instead to focus on the here and now, not what could happen around the corner.”
RBC analysts said: “We think that JD Sports should maintain its position as a preferred partner of major sportswear brands like Nike and Adidas, given its strong retailing skills and ability to appeal to a young sports fashion customer.”
