JD Sports Fashion has launched a share buyback programme saying it intends to return £200 million of capital to shareholders through share buybacks in its current FY27 year.
The company’s share price has faced challenges recently – at Friday’s close it was down over 50% across five years, and almost five per cent YoY. This morning the price rose over three per cent following the announcement.
The announcement comes come as the Greater Manchester-based sportswear and fashion company has failed to generate the growth investors want due to weak demand, particularly in its key UK market. Its problems have been added to by key supplier Nike’s own battles against weak demand globally.
Listed companies often reward their shareholders with dividends, which JD Sports does too, although its recent dividend yield has been marginal. Buybacks are another way to reward holders as the company buying its own shares mean there are fewer shares available, so the dividend pot is divided between fewer individual shareholders. Buybacks also tend to support the share price and usually happen when a business perceives itself as undervalued. An early impact can be seen from the jump in JD’s share price this morning.
The company said the programme is in line with its “capital allocation priorities and its commitment to continue delivering significant cash returns to shareholders.”
The buybacks start immediately and this first part of the programme involving buybacks of £100 million will complete no later than the close of the company’s first half of FY27 on 31 July. A second £100 million stage will start after that.
