JD Sports Fashion plc Performance Overview

JD Sports Fashion plc (LON:JD) (NASDAQ:JD) reported better-than-expected results driven by strong performances in European and North American markets on Tuesday.

Analysts from RBC Capital Markets noted, “At first sight we think the results show how JD’s multi-brand offer is able to offset Nike (NYSE:NKE) weakness, with stronger than expected US and Europe margins. This should also give investors more confidence that JD can achieve its FY25 PBT guidance.”

Stronger-than-expected margins in the U.S. and Europe helped JD Sports exceed forecasts, supporting its full-year 2025 profit before tax guidance.

Financial Highlights

• H1 Sales: £5 billion, slightly exceeding expectations with a year-on-year growth of 6.4%.
• PBT: £406 million, surpassing the consensus estimate of £385 million.
• EPS: 5.15p, edging past forecasts of 5.10p.

Regional Performance

JD Sports reported growth in North America and Europe, where profits exceeded expectations, while the UK and APAC regions performed in line with forecasts.

The company maintained its full-year 2025 PBT guidance of £955-1035 million, matching the consensus estimate of £977 million.

Challenges and Opportunities

The company indicated that foreign exchange impacts would reduce H2 PBT by £20 million, following a £6 million hit in H1. The recent acquisition of Hibbett is expected to contribute £25 million to PBT in H2.

Inventory levels rose by 24% year-on-year, attributed to Hibbett’s acquisition and a seasonal increase of £137 million. This elevated inventory aligns with the company’s expansion strategy.

As of the end of H1, net cash (excluding leases) was £41 million, slightly below projections.

JD Sports remains a key retail partner for major brands such as Nike and Adidas (OTC:ADDYY), leveraging its appeal to urban and price-conscious customers. RBC highlighted opportunities for expansion in the U.S. and improvement in its online presence, especially in Europe.

Governance enhancements are anticipated, although rapid expansion introduces higher execution risks. JD Sports is trading at about 12 times its CY24 estimated P/E, nearing the lower end of its historical range.