JD Sports: Shares drop on tariff uncertainty despite higher dividend
JD Sports has raised its dividend on a double-digit rise in revenue after an uptick in European and North American demand.
Shares, however, dropped more than seven per cent as the retailer warned that the visibility in US trading was uncertain due to the tariff impact.
Overall revenue grew 12 per cent to £11.45bn in the 52 weeks ended February 1, from £10.39bn in 2024.
The company will pay a full-year dividend of £52m, up 11 per cent on last year, and plans to start a £100m share buyback programme.
Profit before tax fell 2.9 per cent to £923m, from £961m the year before “due largely to the continued investment in infrastructure, controls and security” and in line with January guidance, JD said.
Revenue in North America grew 6.4 per cent to £2.4bn, while European revenue grew 12.6 per cent to £2.2bn.
JD Sports has prioritised boosting store presence, with net stores up by 111 in North American during the year.
The company has been struggling recently with a downturn at key brand partner Nike, which has had an overhang of stock as demand shifts from classic trainers to upstarts like Hoka and On.
Tariffs have also introduced uncertainty into JD’s future – most of its brand partners make shoes in south-east Asian countries, which have yet to come to a trade agreement with Trump on the sky-high tariffs he plans to implement on goods.
JD Sports is entering a recovery year
Panmure Liberum analysts rated JD Sports a ‘Hold’.
“The tariff impact, though manageable, keeps us on hold but long-term investors should be considering investing at this level,” analysts said.
Despite the uncertainty, Berenberg analysts have pegged 2026 as a ‘recovery year’ for sales, suggesting five per cent in an average year over the medium term.
Chief Régis Schultz said that overall trading in the first quarter of the new financial year “has been in line with our expectations in a volatile market”.
“Despite this volatility, and uncertainty surrounding the impact of US tariff changes, we look forward into the medium term with confidence that we can continue to outperform the market, improve our profit margin and create significant value for our shareholders.”