JD Sports second-quarter sales drop 3% as U.K. drags, affirms guidance; stock up

Investing.com -- JD Sports Fashion posted a steeper drop in second-quarter underlying sales, weighed down by weakness in the U.K., though performance in its U.S. business showed signs of stabilising after a sharp setback in the prior quarter.

The retailer’s shares rose more than 3% in London trading. 

The company, which generates almost 40% of its revenue in the U.S. through its JD Sports, Hibbett, DTLR and Shoe Palace chains, reported a 3% decline in like-for-like sales in the 13 weeks to August 2, compared with a 2% fall in the first quarter.

Sales declined across most markets, with Asia Pacific the only region showing growth, up 0.3% in the period. In North America, sales slipped 2.3%, while Europe and the U.K. posted declines of 1.1% and 6.1%, respectively.

For the first half of the year, overall sales fell 2.5%.

"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," said Regis Schultz, CEO of JD Sports Fashion.

"In both Europe and the U.K., 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."

Alongside the results, JD Sports unveiled a £100 million share buyback programme, saying it reflects “confidence in medium-term industry growth, our ongoing market share gains and focused execution.”

Looking ahead, the company said it expects to deliver profit before tax and adjusting items for fiscal 2026 in line with market forecasts, though it continues to monitor potential impacts from U.S. tariffs.

On the overall outlook for the second half, JD Sports said it “remains cautious given the continued strains on consumer finances, unemployment risk, and the ongoing shift in the footwear product cycle.”

RBC Capital Markets analysts said that prior to the results, JD was trading at around 9 times estimated 2025 earnings, near the low end of its historical range. They said this reflected subdued near-term prospects but at “what looks like an undemanding level if it can generate sustainable earnings growth.”

The team added that JD “is currently priced somewhat for structural decline, having generated super-normal growth and margins during the pandemic.”