JD Sports beats first-half profit forecasts, reaffirms FY25 guidance by Investing.com

Investing.com — JD Sports Fashion plc (LON:) (NASDAQ:) reported better-than-expected results on Tuesday, driven by a stronger-than-expected performance in both European and North American markets.

“At first glance we think the results show how JD’s multi-brand offering is able to compensate NIKE (NYSE: ) weakness, with stronger-than-expected margins in the US and Europe. This should also give investors more confidence that JD/ can hit its FY25 PBT guidance,” analysts at RBC Capital Markets said in a note.

Stronger-than-expected margins in the US and Europe helped JD Sports beat forecasts, supporting full-year 2025 profit ahead of fiscal guidance.

For the first half, the company reported sales of £5bn, marginally beating expectations, with year-on-year organic growth of 6.4%.

PBT stood at £406m, beating the consensus estimate of £385m, with reported EPS of 5.15p, which also beat the previous forecast of 5.10p.

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

JD Sports maintained its full-year 2025 PBT guidance of £955-1035m, in line with the consensus estimate of £977m.

The company said the currency impact would reduce Q2 PBT by £20m, after a £6m hit in the first half. Hibbett, a recent acquisition, is expected to contribute £25m to PBT in the second half.

The company’s inventory levels rose 24% year-on-year, which can be attributed to both the Hibbett acquisition and a seasonal increase in inventory of £137m.

This higher inventory position, although somewhat high, aligns with the company’s expansion strategy. Net cash, excluding leases, was £41m at the end of the first half, slightly below consensus forecasts.

JD Sports remains a key retail partner for major brands such as Nike and Adidas ( OTC: ), benefiting from its ability to attract urban and price-conscious customers. The company has opportunities to expand its customer base in the US and improve its online presence, particularly in Europe, RBC said.

Improvements in governance are expected, although the rapid pace of expansion poses greater execution risks. Trading at around 12 times CY24 estimated P/E, JD Sports is near the lower end of its historical range.