Shares in JD Sports Fashion (LON:JD) slumped after the sportswear retailer slashed its FY27 profit guidance. The trainers-to-tracksuits seller blamed weak consumer demand for the downgrade after seeing organic sales fall in North America, Europe and the UK in Q2.
Downgrade disappointment
For the year to January 2027, JD Sports is now guiding for adjusted pre-tax profits of £700 million to £800 million. That is down from the athleisure giant’s previous guidance for profits in the £750 million to £850 million range.
The FTSE 100 retailer blamed the warning on weak underlying H1 sales trends and the ‘promotional market backdrop, which may persist into H2’.
Nevertheless, the Nike-to-New Balance brands seller maintained guidance for FY27 free cash flow in the £460 million to £520 million range, reflecting its ongoing cost and capital discipline.
Trading remains tough
Regis Schultz, CEO, said: ‘Trading in the second quarter remained tough. The market stayed highly promotional, reflecting the consumer and footwear product cycle headwinds our industry has faced in recent quarters, whilst our core consumer was impacted by incremental cost-of-living pressures.’
Group organic sales were down 1.3% in the thirteen weeks to 1 August 2026, worse than the 0.1% decline seen in Q1. In North America, organic sales fell 4.5%. JD Sports attributed this poor showing to weaker consumer sentiment, a slower quarter for high-heat footwear and the deferral of some ‘back-to-school’ spending into August.
| Q2 – 13 weeks to 1 August | Organic sales | Like-for-like sales |
| North America | (4.5%) | (6.8%) |
| Europe | (0.4%) | (2.7%) |
| UK | (0.2%) | +0.8% |
| Asia Pacific | +10.2% | +1.4% |
| Group | (1.3%) | (3.1%) |
Source: JD Sports Fashion, Q2 trading update
Trading in the UK proved more resilient. Organic sales softened 0.2% but like-for-like sales edged up 0.8%. Sales were supported by strong football replica kit sales driven by the FIFA World Cup, as well as an improved performance from JD’s Outdoor business.
Elsewhere, Europe witnessed a 0.4% organic sales decline and a 2.7% like-for-like fall, while Asia Pacific remained the strongest region with organic sales up an impressive 10.2%.
Footwear market remains soft
By category, footwear remained soft due to the promotional market backdrop and ‘consumer pressures and ongoing product cycle evolution across key brand partners’.
JD Sports highlighted its net cash balance sheet, and said it commenced the second £100 million tranche of its £200 million share buyback programme on 3 August, ‘reflecting confidence in our medium-term growth and cash generation’.
Back in May, we said JD Sports is a great business, but we saw no rush to buy the shares at that time. Today’s damaging warning and share price plunge validate our cautious stance on the retailer’s near-term recovery prospects.
The youthful shoppers JD Sports targets are feeling the pinch and struggling to find employment. As a result, they are cutting back on the latest footwear and apparel. Furthermore, Schultz expects muted market growth to persist in FY27. And promotional market conditions mean JD’s gross margins could come under further pressure.
Weakening consumer sentiment in North America, which accounts for over a third of JD Sports’ sales, is another red flag and suggests there could be further downgrades to come. Avoid for now.
