JD Sports Fashion PLC Earnings - Q2 2025 Analysis & Highlights
Key Takeaways
JD Sports Fashion PLC's Q2 2026 earnings call, held on 2025-09-24, highlighted the company's resilience in a tough trading environment, strategic focus on becoming a leading sports fashion powerhouse, infrastructure and governance improvements, and commitment to cash generation and shareholder returns. Management discussed financial performance, business segment results, capital allocation, industry trends, the macroeconomic environment, growth strategies, and financial guidance.
Key Financial Results
Total sales were 20% higher year-on-year at constant FX rates, reflecting a full half of sales from Hibbett and Courir.
Organic sales growth was 2.7%, comprising 2.5% lower like-for-like sales and 5.2% growth from net new space.
Gross margin was 48%, 60 basis points behind the prior year.
Operating profit of £369 million was 6.3% lower at constant FX rates.
Profit before tax and adjusting items was £351 million, 11.8% lower at constant FX rates.
Adjusted earnings per share were 8.5% lower year-on-year at constant FX rates.
The board declared an interim dividend of £0.33 per share.
Operating cash flow increased by 5% to £546 million.
Business Segment Results
North America is the largest market, representing 39% of group sales.
UK organic sales were 1.7% lower in H1.
North America margin was 340 basis points lower year-on-year, influenced by the wind-down of the Finish Line fascia and the impact of Hibbett.
Europe saw a decline in the operating margin of 40 basis points due to controlled price investments.
The UK margin was lower by 130 basis points, reflecting tough trading conditions and higher costs.
Capital Allocation
The board declared an interim dividend of £0.33 per share.
A first share buyback program of £100 million was completed in July.
A second £100 million share buyback program was announced in August.
Capital expenditure in the period was £216 million.
Industry Trends and Dynamics
The sports fashion market will continue to grow, benefiting from ongoing casualization and active lifestyle trends.
A fundamental shift is occurring in the global footwear product cycle.
There is increasing demand for performance apparel and street fashion.
Competitive Landscape
JD Group is gaining market share in North America and Europe.
The company's agile and multi-brand model allows it to navigate trends and brand it seamlessly.
The focus on apparel gives JD a unique competitive advantage.
Macroeconomic Environment
Consumer markets have been uncertain.
The political and economic background in major markets has been challenging.
There are pressures on consumer finances and elevated unemployment risk.
The company sees limited financial impact from US tariffs in the current financial year.
Growth Opportunities and Strategies
The company aims to be the leading sport fashion powerhouse.
It is focused on cash generation and shareholder return.
JD is building a fully flexible omnichannel proposition.
The company is developing the JD brand in the US.
It is leveraging its multi-fascia strategy in Europe.
JD is focusing on fewer, bigger, and better stores in the UK.
The company is integrating Courir and converting City Gear stores to DTLR.
Financial Guidance and Outlook
Full-year profit before tax and adjusted items is expected to be in line with current market expectations.
The company remains cautious on the trading environment.
There is an anticipation of limited financial impact from US tariffs in the current financial year.
The company expects to generate significant free cash flow in the second half.
