JD Sports’ latest trading update may have been described as “steady-as-she-goes”, but the market seems to think the retailer is finally regaining its footing.
Shares in the Bury-headquartered giant climbed another 3% in early Thursday trading, extending a rally that has now seen the stock gain 10% over the past month and 28% in the past six months.
It marks a sharp shift in sentiment after years of decline. JD’s share price remains 26% lower than a year ago and around 30% off where it stood five years back but the trajectory over the past half-year suggests renewed investor confidence in the FTSE 100 retailer.
READ MORE: Asia Pacific picks up the slack as JD Sports misses £1bn profit target again
The optimism follows Wednesday’s Q2 results, which showed modest improvements in North America and Asia Pacific like-for-like sales and a maintained full-year profit forecast of around £885m. Investors were also buoyed by the launch of a £100m share buyback programme – a clear signal from management that cash generation remains robust.
While like-for-like sales in the UK and Europe continue to lag amid tough athleisure conditions, analysts argue the worst may now be behind JD. As AJ Bell’s Russ Mould noted, “certain investors might have been expecting the worst so a ‘steady-as-she-goes’ update is considered a win.”
That said, headwinds remain. Consumer caution, high unemployment risk, and looming US tariffs could yet derail momentum. Chief executive Regis Schultz has struck a cautious tone, acknowledging shoppers are becoming increasingly selective.
For now, though, JD looks to have pulled itself out of the danger zone. The question for investors is whether this rebound represents the first stage of a sustained recovery – or just a brief reprieve in a challenging retail cycle.
James Beard of Fool.co.uk is optimistic. He said: “As a shareholder, I remain optimistic. And even with today’s price jump, I still think the stock offers good value. If the analysts are right, adjusted earnings per share for FY26 will be around 11.7p. This means the stock’s trading at only 8.4 times forecast earnings.”
Hargreaves Lansdown are cautiously bullish on the stock too. They said: “The challenges look priced into the current valuation, which sits well below the long-run average, offering both upside potential and some downside protection. We think this could be an attractive entry point for potential long-term investors. However, there’s plenty of challenges in the near term, including ever-changing tariffs and weak consumer sentiment, so be prepared for a bumpy ride.”
