JD Sports Shares Fall As US Tariffs Impact Profits Performance

JD Sports has warned that elevated US tariffs could lead to higher prices for American consumers, as the sportswear giant struggles to navigate a challenging global market. The FTSE 100 retailer, which generates approximately 40% of its revenue in the United States, reported an 11.8% decline in pre-tax profits, dropping to £715 million for the year ending February, compared to £811 million in the previous period.

The company attributed the drop in profits to rising costs associated with the recent acquisition of competitor chains, including Hibbett in the US and Courir in Europe. Investment in bolstering cybersecurity measures also contributed to the increased expenditure. Despite these challenges, JD Sports achieved revenue growth of 8.7%, reaching £11.5 billion for the same period, with like-for-like sales increasing modestly by 0.3%.

The impact of newly imposed tariffs from the US made headlines, with JD Sports citing concerns about the additional cost burden on consumers, which could dampen overall demand. The retailer noted that these trade barriers had affected the group in three main areas: consumer confidence, relationships with brand partners, and the rising costs of goods and services. JD Sports confirmed measures are being taken to mitigate adverse outcomes, including expanding the mix of sourcing countries for its products and implementing tighter cost controls.

Chief Executive Régis Schultz remarked that trading in the first quarter of the financial year had performed in line with company expectations despite ongoing volatility in the sportswear market. Analysts, however, have pointed to JD Sports’ heavy dependence on key suppliers like Nike, which in recent years has faced stiff competition from emerging brands such as On Running and Hoka. These newer players are disrupting the market by catering to fashion-conscious and performance-driven consumers.

Market conditions in the sportswear sector remain particularly challenging online, as JD identified a highly promotional environment pressuring margins. Earlier in the year, the company warned that it did not anticipate any growth in like-for-like store sales and revised down its profit guidance for the year, forecasting profits no greater than £935 million—a reduction from previous estimates ranging between £955 million and £1.03 billion.

Despite the disappointing results, analysts have maintained a positive outlook on JD Sports. Shore Capital highlighted encouraging signs in the company’s strategic direction, price discipline to protect gross margins, and sustained strong cash generation. Peel Hunt analysts reiterated their “buy” rating for JD Sports, underscoring its position as a market leader with potential opportunities to rebound in the future.

Shares in JD Sports dropped 9% in response to the announcement, trading 9p lower at 84p. Over the past year, the stock has declined by approximately 30%, reflecting the pressures faced by the company in an unstable retail environment.