JD Sports FY25 earnings preview: can the sportswear giant overcome challenging market conditions?
JD Sports is set to release its full-year results on 21 May, with investors watching closely for signs of resilience amid profit warnings and cautious consumer spending.
JD Sports' recent trading performance
JD Sports Fashion PLC is set to release its full-year FY25 results and Q1 FY26 update on Wednesday, May 21, 2025. Investors will be closely monitoring the report following the company's earlier profit warnings and ongoing market headwinds.
The company has guided for FY25 pre-tax profit before adjusting items to be between £915 million and £935 million, down from the previous forecast of £955 million to £1.035 billion. This revision reflects a "challenging and volatile" trading environment, characterised by increased promotional activity and cautious consumer behaviour.
Like-for-like (LFL) revenue declined by 1.5% in the nine weeks to 4 January, 2025, despite a strong December performance. Organic revenue growth for the period was 3.4%, with full-year organic revenue expected to grow around 5%.
This divergence between headline and like-for-like performance highlights the importance of JD Sports' acquisition strategy in driving top-line growth during a period of challenging conditions for comparable stores. The extent to which the company can maintain momentum while improving underlying performance will be a key focus of the results.
Regional variations and product mix trends
Footwear sales outperformed apparel, and brick-and-mortar stores exceeded online sales. Regionally, LFL sales growth in Europe and Asia Pacific helped offset weaker performance in the UK and North America.
The stronger showing in continental Europe demonstrates the benefits of JD Sports' geographic diversification strategy, providing some insulation against weakness in its home UK market. Analysts will be looking for more granular insights into regional trends and the company's plans to address underperforming territories.
The outperformance of footwear versus apparel reflects broader industry trends, with branded trainers continuing to show resilience even as consumers pull back on discretionary clothing purchases. JD Sports' strong relationships with key suppliers like Nike and Adidas have historically given it preferential access to in-demand styles.
The superior performance of physical stores compared to online channels represents a notable shift from pandemic-era trends. This suggests that the experiential aspect of JD Sports' retail concept continues to resonate with consumers, though the company will need to address the relative underperformance of its digital channels.
Market challenges and competitive landscape
Looking ahead, JD Sports anticipates a volatile trading environment, influenced by factors such as US tariffs on goods from key supplier countries like Vietnam and Bangladesh. The company expects minimal to no profit growth for the financial year ending February 2026, with analysts forecasting profits between £878 million and £982 million.
The cautious outlook for FY26 indicates that management expects the challenging consumer environment to persist well into the coming year. This measured guidance may be designed to reset expectations after the previous profit warnings, potentially creating room for positive surprises if conditions improve.
The retail sector as a whole faces significant headwinds, with consumers becoming increasingly selective in their discretionary spending. JD Sports' premium positioning within the sportswear segment offers some protection, but is not immune to broader market trends.
Competition in the sportswear retail space remains intense, with both specialist competitors and general merchandise retailers vying for market share. JD Sports' ability to maintain its differentiated offering and exclusive product access will be critical in this environment.
Strategic initiatives and capital allocation
Despite these challenges, JD Sports has initiated a £100 million share buyback program and continues to focus on strategic acquisitions, such as the purchase of Hibbett Inc., to bolster its market position.
The share buyback demonstrates management's confidence in the company's long-term prospects and their belief that the current share price undervalues the business. This capital return to shareholders comes despite the challenging operating environment, suggesting a strong underlying cash position.
The acquisition of Hibbett Inc. represents a significant expansion of JD Sports' footprint in the US market, adding approximately 1,100 stores across 36 states. This move aligns with the company's strategy of building scale in the world's largest sportswear market, though integration progress and performance will be closely watched given the current weakness in North American trading.
Beyond acquisitions, JD Sports continues to invest in enhancing its store experience and digital capabilities. Updates on these strategic initiatives and their expected impact on future performance will be a key focus of the results presentation.
Margin pressures and cost management
A critical component of the upcoming results will be JD Sports' commentary on gross margins and cost control measures implemented to protect profitability in a challenging trading environment.
The increased promotional activity noted in previous trading updates suggests pressure on gross margins, as retailers across the sector have been forced to discount to drive sales. The extent to which JD Sports has been able to maintain pricing discipline while remaining competitive will be crucial.
Cost inflation across the retail sector, particularly in wages, energy, and logistics, has created additional headwinds. JD Sports' approach to managing these pressures while maintaining service levels and store experience will be closely scrutinised.
Supply chain challenges and the potential impact of new tariffs on goods from key manufacturing countries represent additional complexity for inventory management and sourcing strategies. Management's assessment of these risks and mitigation measures will be important for understanding the company's future margin outlook.
JD Sports analyst ratings
According to LSEG Data & Analytics, 4 analysts have a ‘strong buy’ recommendation for JD Sports, 5 a ‘buy’ and 9 a ‘hold’ with a median long-term upside target at 113.75p, 24% above its current share price (as of 20/05/2025).
JD Sports LSEG Data & Analytics chart
JD Sports has a TipRanks Smart Score of ‘4 Neutral’ but is rated as a ‘buy’ with 2 ’buy’ and 4 ‘hold’ recommendations (as of 20/05/2025).
JD Sports share price technical analysis
The JD Sports share price, down around 3% year-to-date compared to the FTSE 100’s near 6% gain, has risen by around 50% from its April near 8-year low at 61.04 pence.
JD Sports monthly candlestick chart
The November-to-December 2024 lows at 92.14p-to-93.30p currently act as minor resistance. Were it and last week’s high at 94.92p to be exceeded, the December-to-January highs as well as the 200-day simple moving average (SMA) at 103.94p-to-105.75p would be targeted.
JD Sports daily candlestick chart
A rise above the December peak at 105.75p would allow for the May-to-July 2024 lows at 110.60p-to-110.65p to be reached and for the November 2024 price gap to the 20 November low at 112.35p to be filled.
Further potential upside targets are the late May 2024 and August 2024 lows at 115.00p-to-116.25p.
Support below the late January-to-February highs at 90.34p-to-89.74p lies between the January-to-mid-February lows and the March-to-10 April highs at 82.34p-to-80.20p.
While the second to last reaction low on the daily candlestick chart, a low which is lower than on the preceding and following day, at the 2 May 77.68p low holds on a daily chart closing basis, the medium-term uptrend is deemed to stay intact.
How to trade JD Sports shares
Investors will be keen to see how JD Sports navigates these headwinds and positions itself for future growth in the upcoming earnings report. For those looking to take a position ahead of the results, IG offers several ways to trade or invest in JD Sports shares.
- Research JD Sports' financial performance, strategic initiatives, and competitive positioning to inform your trading decision.
- Consider how consumer spending trends and market challenges might impact the company's near-term prospects.
- Open an account with IG by visiting our website and completing the application process.
- Search for 'JD Sports' or its ticker 'JD' on our trading platform or app.
- Place your trade, ensuring you have appropriate risk management measures in place given the potential volatility around earnings announcements.
Spread betting and CFD trading offer ways to potentially profit from both rising and falling share prices, with the ability to apply leverage to your position. This approach might suit traders looking to capitalise on the short-term price movement that typically follows results announcements.
For those with a longer-term investment horizon who believe in JD Sports' growth strategy despite current headwinds, share dealing provides a more straightforward approach to building a position in the company.
JD Sports' upcoming results will provide crucial insights into how effectively the sportswear retailer is navigating the challenging consumer environment. While near-term expectations have been reset lower, the company's strategic initiatives in global expansion and digital enhancement may position it well for recovery when market conditions improve. Investors will be watching closely for signs that JD Sports can maintain its market-leading position while managing the current headwinds affecting the retail sector.
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