JD Sports share price tumbles by 6% despite strong profit outlook

JD Sports (LSE: JD) delivered an optimistic forecast to investors today, stating that it is on track to surpass the billion-pound profit milestone this year.

However, despite this encouraging news, a cautionary note about a slight softening in certain areas has unsettled shareholders, resulting in a 6% decline in JD’s share price during early trading in London.

The FTSE 100-listed company, ahead of its Annual General Meeting (AGM) scheduled for today, reported that trading had remained positive throughout May, exhibiting an impressive 8% increase in organic sales. Furthermore, signs of stabilization were observed in the previously challenging retail supply chain.

Despite these positive indicators, JD Sports highlighted that growth in the United Kingdom and Europe was somewhat offset by softer trade in North America, a trend consistent with other businesses operating in the sector.

Regis Schulz, JD’s new CEO and former chief of B&Q, has steered the company towards strong sales growth since assuming leadership earlier this year. The initial phase of his tenure showcased robust organic sales growth of 15%, reflecting his strategic acumen.

Schulz, keen on expanding JD Sports’ market presence, announced plans to invest up to £3 billion in opening over 1,000 new stores in the coming years. In line with this vision, the company recently acquired the prominent French sports brand Courir for a notable £425 million, further solidifying its market position.

“In our growth strategy in Europe, securing greater control over the long-term development of JD and prioritising the expansion of the JD brand are key pillars,” Schulz commented when the Courir acquisition was announced in May.

During the course of this year, JD Sports has already launched 32 new stores, and it has ambitious plans to open up to 150 additional sites within the next 12 months. This expansion drive underpins the company’s determination to strengthen its foothold in the retail industry.