Picture supply: Britvic (copyright Evan Doherty)
The JD Sports activities (LSE: JD) share worth slipped yesterday morning (24 September) after the discharge of the group’s half-year outcomes (for the 26 weeks to 2 August 2025). Nonetheless, it bounced again to complete the day comparatively flat.
Traders didn’t overreact to the weaker numbers, maybe an indication that expectations had already been properly managed.
The inventory touched 86p by noon however closed again up at 88p, the place it had began the session. That will not sound dramatic, however for a corporation that’s been down 44% over the previous 5 years, each little bit of stability counts.
Encouragingly, JD is now up 43% from its April low of 61p. For a retailer in at the moment’s robust client surroundings, that’s no small achievement.
Blended outcomes
Revenue earlier than tax fell 13.5% to £351m, whereas working revenue earlier than adjusting gadgets slipped 8.2% to £369m. Natural gross sales at fixed currencies have been up 2.7%, which exhibits some underlying energy, however not sufficient to impress the market.
On the constructive facet, the group held its interim dividend at 33p per share and introduced a £100m share buyback programme. That ought to present some assist to the share worth over the approaching months.
The outcomes should be seen in context. In late July, JD had already warned a few 2.5% dip in like-for-like gross sales in comparison with the identical interval in 2025. That early steering in all probability softened yesterday’s impression. It was a wise little bit of expectation administration, and the muted share worth response displays that.
Enlargement continues
Regardless of the squeeze on margins, JD Sports activities is urgent forward with progress. It acquired two new companies this 12 months: Hibbett within the US and Courir in Europe. In the meantime, it continues to open shops below its present banners, together with End Line within the US and Sprinter in mainland Europe. The group now operates 4,872 shops worldwide, with the Trafford Centre in Manchester just lately welcoming its largest ever website.
This technique retains it on the entrance foot however naturally carries threat. Acquisitions can simply go incorrect, and retailer expansions are pricey in a interval of subdued client spending. If inflation stays cussed and rates of interest don’t fall shortly sufficient, these investments may weigh on profitability moderately than increase it.
The place to from right here?
Valuation-wise, JD Sports activities could be value a more in-depth look. Its ahead price-to-earnings (P/E) ratio of seven.59 and price-to-sales (P/S) ratio of 0.37 counsel the inventory is reasonable relative to anticipated progress. Earnings have jumped 58.8% 12 months on 12 months, and income climbed 14.6%.
Nonetheless, the steadiness sheet is a little bit stretched. Debt outweighs fairness by 1.3 occasions, which isn’t alarming however leaves much less room for manoeuvre if buying and selling worsens. Return on fairness (ROE) stays affordable, however weak client demand is the plain sticking level. If consumers proceed to chop again on premium sportswear, margins will keep below strain.
From my perspective, the important thing difficulty is inflation. If it moderates within the coming months, JD might be one of many stronger restoration performs within the FTSE 100. However till spending energy improves, there’s nonetheless quite a lot of threat to weigh up.
For worth traders, I feel JD Sports activities is a inventory to think about. It’s made stable progress this 12 months and has loads of progress potential if situations enhance. The query is how lengthy traders must wait earlier than the restoration totally takes maintain.
