JD Sports: Softer North America weighed on Q2, full-year guidance cut

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Europe Equity Research

20 August 2026

JD Sports

First Take: Softer North America weighed on Q2, fullyear guidance cut

Our Take: This morning, JD reported its Q2 27 (May-July) trading update with

total sales in line with our estimates, but cut FY27 adjusted PBT guidance. Overall,

Q2 Group LFL sales were -3.1% LFL (JPMe -3.9%), decelerating sequentially

from Q1 despite easier comps. This was mostly driven by a softer North America

market with LFL -6.8% (JPMe: -0.8%), driven by “weaker core consumer

sentiment, a slower quarter for high-heat footwear product, and deferred ‘back-toschool’ demand from July into the first half of August” while Europe and UK were

better than our estimates. Below the top line, gross margin performance was in line

with company expectations (although the release did not quantify, we note

company consensus -50bps, JPMe -60bps). In terms of outlook, JD now expects

adjusted PBT in the range of £700m to £800m (previously £750m to £850m),

driven by “underlying H1 sales trends and the promotional market backdrop”, but

maintained free cash flow guidance. Given the soft quarter and downward

guidance revision, we expect to see some share price pressure first thing this

morning.

Noteworthy Areas: 1) Q2 Group sales growth slightly missed our

estimates, coming in at -3.1% LFL/ -1.3% organic (vs JPMe -3.9%/-1.6%) and

also decelerating sequentially from Q1 levels (-2.3% / ‘flat’) despite easier

comps, with the release noting “trading in the second quarter was tough” due

to a highly promotional market along with footwear product cycle headwinds.

Overall, H1 27 Group sales were -2.8% LFL and -0.7% organic, below the

company consensus of -2.0%/+0.2%; 2) By region, UK and Europe

surprisingly performed better than expected, with LFL sales at +0.8% and 2.7% respectively (vs JPMe -6.5%/-6.0%), driven by apparel and accessories

along with improved Outdoor business performance. The release flagged

weaker consumer sentiment in North America LFL, missing our estimates and

decelerating sequentially at -6.8% (JPMe -0.8%) vs Q1 -0.6% on tougher

comps, dragged by deferred back-to-school demand from July into the first half

of August.…