Image source: Britvic (copyright Evan Doherty)
The JD Sports (LSE: JD) share price slipped yesterday morning (24 September) after the release of the group’s half-year results (for the 26 weeks to 2 August 2025). However, it bounced back to finish the day relatively flat.
Investors didn’t overreact to the weaker numbers, perhaps a sign that expectations had already been well managed.
The stock touched 86p by midday but closed back up at 88p, where it had started the session. That may not sound dramatic, but for a company that’s been down 44% over the past five years, every bit of stability counts.
Encouragingly, JD is now up 43% from its April low of 61p. For a retailer in today’s tough consumer environment, that’s no small achievement.
Mixed results
Profit before tax fell 13.5% to £351m, while operating profit before adjusting items slipped 8.2% to £369m. Organic sales at constant currencies were up 2.7%, which shows some underlying strength, but not enough to impress the market.
On the positive side, the group held its interim dividend at 33p per share and announced a £100m share buyback programme. That should provide some support to the share price over the coming months.
The results need to be seen in context. In late July, JD had already warned about a 2.5% dip in like-for-like sales compared to the same period in 2025. That early guidance probably softened yesterday’s impact. It was a smart bit of expectation management, and the muted share price reaction reflects that.
Expansion continues
Despite the squeeze on margins, JD Sports is pressing ahead with growth. It acquired two new businesses this year: Hibbett in the US and Courir in Europe. Meanwhile, it continues to open stores under its existing banners, including Finish Line in the US and Sprinter in mainland Europe. The group now operates 4,872 stores worldwide, with the Trafford Centre in Manchester recently welcoming its largest ever site.
This strategy keeps it on the front foot but naturally carries risk. Acquisitions can easily go wrong, and store expansions are costly in a period of subdued consumer spending. If inflation stays stubborn and interest rates don’t fall quickly enough, these investments could weigh on profitability rather than boost it.
Where to from here?
Valuation-wise, JD Sports might be worth a closer look. Its forward price-to-earnings (P/E) ratio of 7.59 and price-to-sales (P/S) ratio of 0.37 suggest the stock is cheap relative to expected growth. Earnings have jumped 58.8% year on year, and revenue climbed 14.6%.
However, the balance sheet is a little stretched. Debt outweighs equity by 1.3 times, which isn’t alarming but leaves less room for manoeuvre if trading worsens. Return on equity (ROE) remains reasonable, but weak consumer demand is the obvious sticking point. If shoppers continue to cut back on premium sportswear, margins will stay under pressure.
From my perspective, the key issue is inflation. If it moderates in the coming months, JD could be one of the stronger recovery plays in the FTSE 100. But until spending power improves, there’s still a lot of risk to weigh up.
For value investors, I think JD Sports is a stock to consider. It’s made solid progress this year and has plenty of growth potential if conditions improve. The question is how long investors will have to wait before the recovery fully takes hold.
This story originally appeared on Motley Fool
