JD Sports has reported that its Q2 results are in line with expectations as its group like-for-like (LFL) sales dropped by 3% from last year.
The sports fashion retailer noted improved LFL sales in Q2 in North America, while the UK and Europe were affected by “tough prior year comparatives” as a result of the Euro 2024 tournament.
In the 26 weeks to 2 August, JD's LFL sales also fell by 2.5%, although the company stated that it had maintained trading disciplines with controlled price investments, particularly online.
Chief executive officer at JD Sports Fashion, Régis Schultz, said: "We are making strong progress in developing our omnichannel customer proposition, store footprint and supply chain, and we are controlling our costs and cash effectively. I am proud of all our teams across the globe for their energy and focus against tough trading conditions.
"Across our regions and fascias, in general we see a resilient consumer, albeit very selective on their purchases. We therefore remain cautious on the trading environment going into H2."
Looking ahead, JD expects to report a profit before tax and adjusted items of £885m, with a range of £852m to £915m.
However, the company did state that while it does not consider direct impacts of US tariffs to be material, it is continuing to assess any potential impacts as it reviews how its brand partners address the situation.
It will provide a further update on its tariffs position in its half-year update on 24 September.
JD has also announced a new £100m share buyback programme, which will commence following its H1 results. This follows its ordinary dividend and its recent £100m share buyback scheme, which completed last month.
Following this announcement, shares in JD increased by almost 4%. However, this was after a year-on-year drop of over 31%, following multiple reductions to its profit guidance in the last financial year.
Investment director at AJ Bell, Russ Mould, said that while there had been improvements in its North America and Asia Pacific regions, deterioration in the UK and Europe meant JD was "still considerably short of the athletic prowess" portrayed in its product marketing.
He concluded: "The figures are good enough to lift JD out of the danger zone, helped by saying full-year profit will hit market forecasts. Certain investors might have been expecting the worst so a ‘steady-as-she-goes’ update is considered a win.
"Crucial to JD’s share price performance going forward is the company’s ability to navigate the new tariff regime given the US is now one of its biggest sales regions. There is also the fact JD has adopted a cautious tone, noting that consumers are being picky with how and where they spend money. It’s clear that JD is walking a tightrope and it wouldn’t take much to knock it off course."
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