REG - JD Sports Fashion - Q2 TRADING STATEMENT 2025/26

JD Sports FashionAnnouncement

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RNS Number : 7639W  JD Sports Fashion PLC  27 August 2025

 

Q2 TRADING STATEMENT 2025/26

Focused execution against our strategic objectives;

announcing further £100m share buyback

 

Sales performance by region:

 

                Q2: 13 weeks to 2 August           H1: 26 weeks to 2 August
                Like-for-like((1))  Organic((1))   Like-for-like((1))  Organic((1))
 North America  (2.3)%              +4.8%          (3.8)%              +3.1%
 Europe         (1.1)%              +5.4%          (0.4)%              +5.9%
 UK             (6.1)%              (4.5)%         (3.3)%              (1.8)%
 Asia Pacific   +0.3%               +9.3%          (2.4)%              +6.0%
 Group          (3.0)%              +2.2%          (2.5)%              +2.6%

Refer to appendix 1 for sales by segment

Headlines:

·      Improved LFL sales trend for Q2 in North America; Europe & UK
affected by tough prior year comparatives due to Euro 2024 tournament

·      Good performance in apparel; footwear softer given end of cycle
for key product lines

·      Maintaining trading disciplines with controlled price
investments, particularly in online

·      Strong progress against strategic objectives across omnichannel
customer proposition, store footprint, supply chain and North America
operations. Costs and cash being well controlled

·      Expect to be in line with current market expectations((2,3)) for
FY26 profit before tax and adjusting items (PBTAI), albeit we continue to
assess potential impacts from US tariffs

·      Announcing today a new £100m share buyback programme, reflecting
confidence in medium-term industry growth, our ongoing market share gains and
focused execution

 

Régis Schultz, CEO of JD Sports Fashion plc:

"We are making strong progress in developing our omnichannel customer
proposition, store footprint and supply chain, and we are controlling our
costs and cash effectively. I am proud of all our teams across the globe for
their energy and focus against tough trading conditions.

"For Q2, in North America we saw an improved performance following the
deferral of several product launches from Q1, along with stronger sales trends
in apparel and online. In both Europe and the UK, we were annualising tough
comparators from the Euros football tournament last year, but still saw a good
underlying performance in apparel and from newer footwear lines.

"Across our regions and fascias, in general we see a resilient consumer,
albeit very selective on their purchases. We therefore remain cautious on the
trading environment going into H2. For our FY26 profit before tax and
adjusting items we expect to be in line with current market expectations,
before any indirect impact of US tariffs which we continue to work through.

"We are well placed to continue growing our market share in the key growth
regions of North America and Europe, and confident about the medium-term
growth prospects for our industry. Reflecting this, we are reaffirming our
commitment to enhanced shareholder returns, and announcing today a new £100m
share buyback following the successful completion of the first £100m
programme last month."

 

 

Strong and focused execution against strategic objectives:

·      North American operations: (i) DTLR and Shoe Palace took over the
operations of 198 City Gear stores on 1 June; (ii) our new JD/Finish Line
e-commerce platform went live in H1; and (iii) Shoe Palace's Morgan Hill
distribution centre (west coast of the US) went live in May, with JD/Finish
Line planning to go live at the end of this year. This will make Morgan Hill
the JD Group's first multi-fascia distribution centre, unlocking significant
improvements in speed to store replenishment and online fulfilment

·      European supply chain: JD Group's Heerlen distribution centre
(The Netherlands) continues to ramp up, and is on track to launch automation
this year (for stores, with online to follow in H1 next year)

·      Focused JD fascia store openings: In H1 we opened new JD fascia
flagship stores in the UK (Trafford Centre, Manchester), North America (Las
Vegas and Vancouver) and Asia Pacific (Melbourne), with positive early
learnings and strong results in particular from the Trafford Centre store.
Also in the period, in North America we saw the conversion of 22 Finish Line
stores into JD fascia stores. Global JD LFL -3.0% and organic sales growth
+3.7%, with +42 net new JD stores (driven by North America and Europe)

·

·

Q2 Performance highlights:

North America (36% of Q2 sales)

·      Resilient performance led by JD and DTLR fascias, against strong
Q2 comparatives

·      Good performance in newer footwear lines (following a shift in
the product launch schedule from Q1, as previously highlighted), partially
offsetting the impact of key product lines being at the end of cycle

·      Strong performance in apparel, albeit a smaller proportion of our
category mix in North America

·      Much improved overall online performance, supported by a better
online range and focused marketing

·      Continuing to manage the conversion to JD of the Finish Line
fascia, where market-driven promotional intensity remains higher than normal
in the short term

·      Pricing and gross margin % well managed overall

Europe & UK((4)) (34% and 26% of Q2 sales, respectively)

·      Both regions had tough comparatives from: (i) last year's Euro
2024 football tournament (replica kit and in-store cross-sell) and (ii)
athletic footwear for women

·      Resilient underlying performance in apparel, supported by a
strong product offer

·      Footwear performance in both regions supported by newer footwear
lines (especially performance-based) and value-oriented footwear, against
tough comparatives, especially in footwear for women and juniors

·      Maintained in-store pricing disciplines in both regions.
Controlled price investments in the online offer to boost competitivity and
increase engagement with online customers. Reflected in higher European online
traffic and conversion in Q2

·

·

H1 Group gross margin % MOVEMENT:

·      Excluding Hibbett and Courir (businesses acquired in FY25), gross
margin % for the Group in H1 was 40bps lower YoY. This was largely driven by
controlled price investments in the online offer

·      Including acquisitions, the overall gross margin % in H1 was
60bps lower YoY

·      Inventory levels at the end of H1 were in line with our
expectations, and continue to be managed effectively

·

·

OUTLOOK AND GUIDANCE((5)):

·      On overall trading conditions through H2, we remain cautious
given the continued strains on consumer finances, unemployment risk, and the
ongoing shift in the footwear product cycle

·      We expect to be in line with current market expectations((2,3))
for FY26 profit before tax and adjusting items (PBTAI), albeit we continue to
assess the potential impacts from US tariffs

·      US tariffs: As a reminder, we do not consider direct impacts of
US tariffs on JD to be material. On indirect impacts, we continue to monitor
the ever-changing landscape on tariffs, keeping in close contact with our
brand partners on how they are addressing the situation. We'll provide a
further update within our H1 results on 24 September

·      Profit phasing H1/H2: Historically, we have generated more of our
profits in H2, owing to seasonality within the business. In FY26, H2 is likely
to represent c.60% of our PBTAI, including the impact of:

o  An expected mark-to-market (non-cash) net charge of c.£14m in H1, mainly
related to the revaluation of open FX hedging contracts as of 2 August 2025

o  The expected benefit in H2 from US (Hibbett) synergies starting to come
through

·

·

REFINANCING AND SHAREHOLDER RETURNS:

·      Refinancing: In early July, JD Group completed a comprehensive
refinancing of its debt facilities, securing a new 5-year £1bn multi-bank
revolving credit facility and associated 3-year US$700m term loan

·      Strong free cash flow; new £100m share buyback programme: In
line with our capital allocation policy and reflecting our strong free cash
flow generation, the Board has determined that surplus capital is available
for return to shareholders. Further to the ordinary dividend and the recently
completed £100m share buyback programme (as announced on 28 July 2025), the
Board is pleased to announce the return of a further £100m via a share
buyback programme. The Board has selected this mechanism of returning surplus
capital as they believe it represents a compelling return on equity given JD's
current share price levels. We expect to commence the programme post the
announcement of our H1 results on 24 September

 

·

·

·

APPENDIX 1: SALES BY REGION AND SEGMENT

Total sales below (in £m) include the results of Hibbett and Courier. JD
Group completed the acquisition of Hibbett on 25 July 2024, and Courir on 27
November 2024. Organic sales growth excludes acquisitions and disposals, and
is calculated at constant FX rates.

Sales by region

 

                Q2: 13 weeks to 2 August
                Total sales (£m)   Like-for-like  Organic
 North America  1,116              (2.3)%         +4.8%
 Europe         1,055              (1.1)%         +5.4%
 UK             806                (6.1)%         (4.5)%
 Asia Pacific   129                +0.3%          +9.3%
 Group          3,106              (3.0)%         +2.2%

 

                H1: 26 weeks to 2 August
                Total sales (£m)   Like-for-like  Organic
 North America  2,318              (3.8)%         +3.1%
 Europe         1,921              (0.4)%         +5.9%
 UK             1,463              (3.3)%         (1.8)%
 Asia Pacific   238                (2.4)%         +6.0%
 Group          5,940              (2.5)%         +2.6%

 

Sales by segment

 

                               Q2: 13 weeks to 2 August
                               Total sales (£m)   Like-for-like  Organic
 JD                            1,968              (3.9)%         +2.8%
 Complementary Concepts        755                +0.4%          +3.6%
 Sporting Goods & Outdoor      383                (1.6)%         (1.7)%
 Group                         3,106              (3.0)%         +2.2%

 

                               H1: 26 weeks to 2 August
                               Total sales (£m)   Like-for-like  Organic
 JD                            3,673              (3.0)%         +3.7%
 Complementary Concepts        1,568              (2.5)%         +1.0%
 Sporting Goods & Outdoor      699                -              (0.8)%
 Group                         5,940              (2.5)%         +2.6%

 

Footnotes

((1)) Please refer to page 252 (within 'Alternative Performance Measures') of
JD's Annual Report & Accounts 2025 for the full definitions of LFL
(like-for-like) and organic sales growth

((2)) According to Company-compiled data as of 26 August 2025, the current
consensus of 17 sell-side analyst expectations for FY26 PBTAI is £885m, with
a range of £852m to £915m

((3)) Assuming FX rates of GBP-USD of 1.33 and GBP-EUR of 1.16. Average
exchange rates in H126 were GBP-USD of 1.31 and GBP-EUR of 1.16 (H125: GBP-USD
of 1.27 and GBP-EUR of 1.17)

((4)) We see organic sales growth as a better sales KPI than like-for-like in
the UK. JD's store strategy in the UK is to optimise its footprint and sales
densities, the benefit of which is not yet captured in like-for-like. For
example, our new flagship store at the Trafford Centre in Manchester is
performing strongly, but is resulting in - as planned for and as per our
experience - an impact on other JD stores in the vicinity

((5)) Please refer to JD's IR website
(www.jdplc.com/investor-relations/results-centre
(http://www.jdplc.com/investor-relations/results-centre) ) for an aide memoire
on guidance ahead of our H1 results

 

Embargoed until 7am British Summer Time, 27 August 2025

 

 JD Sports Fashion plc                      Tel: 0161 767 1000
 Régis Schultz, Chief Executive Officer
 Dominic Platt, Chief Financial Officer
 Maj Nazir, Director of Investor Relations

 Advisors
 Bank of America - Antonia Rowan            Tel: 0207 628 1000
 Peel Hunt LLP - Dan Webster                Tel: 0207 418 8869
 FGS Global - Rollo Head, James Thompson    Tel: 0207 251 3801

 

Forward-looking statements

This announcement contains certain forward-looking statements relating to
expected or anticipated results, performance or events. Such statements are
subject to normal risks associated with the uncertainties in our business,
supply chain and consumer demand along with risks associated with
macro-economic, political and social factors in the markets in which we
operate. Whilst we believe that the expectations reflected herein are
reasonable based on the information we have as at the date of this
announcement, actual outcomes may vary significantly owing to factors outside
the control of the Group, such as cost of materials or demand for our
products, or within our control such as our investment decisions, allocation
of resources or changes to our plans or strategy. Except as required by
applicable law or regulation, the Group disclaims any obligation or
undertaking to revise forward-looking statements made in this or other
announcements to reflect changes in our expectations or circumstances. As
such, undue reliance should not be placed on the forward-looking statements
contained within this announcement.

 

Financial calendar

There is no management call today. The next scheduled events are:

 

24 September 2025: H1 results 2025/26

20 November 2025: Q3 trading statement 2025/26

 

About JD Sports Fashion plc

Founded in 1981, the JD Group ('JD') is a leading global omnichannel retailer
of Sports Fashion brands. JD provides customers with the latest sports fashion
through working with established and new brands to deliver products that our
customers most want, across both footwear and apparel. The vision of JD is to
inspire the emerging generation of consumers through a connection to the
universal culture of sport, music and fashion. JD focuses on four strategic
pillars: JD Brand First, first priority, first in the world; leveraging
Complementary Concepts to support JD Group global expansion; moving Beyond
Physical Retail by building the right infrastructure and creating a lifestyle
ecosystem of relevant products and services; and doing the best for its
People, Partners and Communities. JD is a constituent of the FTSE 100 index,
with 4,872 stores across 36 countries as of 2 August 2025.

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