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(Sharecast News) - Retailer JD Sports Fashion reported a drop in second quarter sales on Thursday and cut its fullyear profit guidance, pointing to a stillpromotional market and softer consumer demand across key regions.
JD Sports said Q2 organic revenues fell 1.3%, widening from the 0.1% decline seen in Q1, while likeforlike sales were down 3.1% against a 2.5% fall in the prior quarter.
Footwear remained under pressure amid weaker consumer sentiment and a more muted product cycle at major brand partners, though apparel and accessories were said to have performed well across regions.
Online sales grew 2.6%, helped by stronger apparel and increased storebased fulfilment, while store footfall was lower yearonyear outside of key events.
North America continued to lag, reflecting softer demand, fewer highheat footwear launches and a shift in backtoschool spending into early August, while the UK delivered an improved trend, supported by apparel, accessories and strong football replica sales, and Europe saw steadier trading in a subdued backdrop, helped by resilient performance in its sportinggoods businesses. Asia Pacific remained the standout, with doubledigit organic growth.
The FTSE 100-listed group said gross margins for the half were in line with expectations, with controlled price investments offset by higher marketing contributions. Costs and inventory were tightly managed, and JD ended the period in a net cash position before leases. JD also began the second £100m tranche of its £200m annual buyback programme.
Given underlying H1 trends and a promotional market that may persist into H2, JD now expects FY27 pretax profit of £700m to £800m, down from £750m to £850m previously. Free cash flow guidance was maintained at £460m to £520m.
Shore Capital said JD Sports' Q2 update showed a clear slowdown in sales momentum, with a tough consumer backdrop, heavy promotional activity and a lack of highheat footwear weighing on performance. The broker described the update as "disappointing", noting that softer trading had fed directly into reduced earnings expectations. Shore Capital said it had trimmed its own pre-tax profit forecasts by around 9% to 10% across the forecast period, but maintained its 75p target price and 'hold' recommendation.
As of 0840 BST, JD Sports shares had sunk 11.84% to 82.40p.
Reporting by Iain Gilbert at Sharecast.com
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