JD Sports shares were slightly higher on Wednesday after the sports fashion retailer announced sales declined at the same pace in the key Christmas trading period as earlier last year.
Investors would have been nervous going into today’s update, given the company’s poor year last year. Thankfully, things haven’t deteriorated materially, and the small gain for shares is more a reflection of relief than optimism about the company’s growth prospects.
JD Sports reported like-for-like sales declining 1.8% in the fourth quarter to date, matching the 1.7% fall seen in the third quarter, as weakness in footwear offset continued strength in apparel.
“JD hasn’t kicked 2026 off in style, with a relatively underwhelming sales performance over the peak festive season,” said Aarin Chiekrie, equity analyst, Hargreaves Lansdown.
“The group had entered the period on the back foot, having lowered its full-year profit guidance back in November due to weak macroeconomic and consumer data. That trend continued over Christmas, with trading in the UK remaining a major pain point.”
Although falling sales don’t make for pretty reading, there are signs of stabilisation after sales declines at a rate of more than 2% earlier in the year.
The group’s organic sales rose 1.4% in the period, with North America showing an improved trend whilst Europe and the UK weakened compared to the previous quarter.
The retailer said footwear sales remained soft due to end-of-cycle product line headwinds, despite positive momentum in running categories, whilst apparel continued to demonstrate resilience.
One of JD’s biggest issues is its reliance on big suppliers like Nike to churn out innovative new products to drive sales. And this has been lacking.
“JD’s near-term growth hinges on how effectively it leverages its multi-fascia model to match brand partners’ demographic strengths, as Nike re-engages with wholesale and brands such as On, Asics and New Balance gain fashion relevance,” said Yanmei Tang, Analyst at Third Bridge.
“Third Bridge experts say meaningful market outperformance is unlikely before integration benefits are fully realised, with the UK and US remaining largely saturated. Canada and Italy stand out as white-space markets where JD could outgrow the sector.”
The company said it remains on track to deliver profit before tax and adjusting items in line with current market expectations and generate free cash flow of approximately £400m in FY26, having completed £200m of share buybacks.
JD is rolling out new e-commerce platforms in Europe and the UK, set to commence in 2026 following successful implementations in the US and Italy, whilst automation continues to ramp up at its Heerlen distribution centre. These measures should help improve margins when consumer confidence returns.