JD Sports Fashion posts 10.5% revenue growth despite declining footwear demand

JD Sports Fashion increased revenue by 10.5 percent to £12.66 billion (€14.69bn at current exchange rates) in the 2025/26 fiscal year, while organic growth stood at 2.1 percent. However, weighed down by a weaker footwear cycle, targeted pricing measures in the online business, and higher integration and restructuring costs, operating profit before exceptional items fell by 5.4 percent to £886 million (€1.03bn). The operating margin decreased from 8.2 percent to 7.0 percent, while profit before tax and exceptional items fell by 7.7 percent to £852 million (€988m).

At the same time, free cash flow increased significantly by 36.3 percent to £462 million (€536m), while net debt was further reduced. North America emerged as the strongest region with organic growth of 3.2 percent, while Europe grew by 4.2 percent. The UK, however, remained weak and recorded a 2.5 percent decline in organic sales. The apparel business performed particularly strongly with organic growth of around 5 percent, while footwear stagnated.

Weakness in sneakers weighs on the core business

The weak footwear cycle was a recurring theme throughout the sports fashion retailer’s entire fiscal year. Demand declined over the course of the year, particularly for major lifestyle and sneaker franchises of many brand partners, as several previously highly sought-after models reached the end of their product cycle. As a result, footwear remained flat year-over-year on an organic basis, while the Group’s like-for-like sales declined by 2.1 percent. The Group therefore responded with targeted pricing measures, particularly in its online business, to maintain reach and conversion rates – a step that, while putting pressure on margins, was intended to support demand.

Apparel cushions the weak footwear market

At the same time, other categories performed significantly more robustly: Apparel grew organically by around 5 percent, and Accessories by as much as around 11 percent. Womenswear, in particular, performed significantly better than the classic sneaker business over several quarters. The sports company is strategically expanding its apparel offering for women and is benefiting from the ongoing trend toward athleisure, running, and lifestyle-oriented sports fashion.

Running remains a key trend

Running also remained a key growth driver in the footwear segment. “In footwear, despite known end-of-cycle product headwinds, ‘running’ remains a key trend for our customers,” CEO Régis Schultz explained as early as the third quarter. In addition, JD benefited from its growing own-brand pipeline, which now accounts for around 15 percent of apparel sales and enables the omnichannel retailer to incorporate new trends into its product range more quickly and with higher margins. Apparel thus increasingly became a strategic anchor of stability and helped to partially offset the weakness in the traditional sneaker business.

North America strong, Europe resilient

This trend was also reflected regionally. North America benefited from strong demand for apparel and running gear, as well as improved online performance, and emerged as the most important growth region over the course of the year. Organic revenue there increased by 3.2 percent. JD also cited successful product launches in the running and retro basketball segments, targeted marketing, and progress with the e-commerce platform and omnichannel management.

Europe also proved resilient, growing organically by 4.2 percent. This was driven by a robust apparel business, stable sporting goods operations, and increased use of ship-from-store and click-and-collect offerings.

Home market remains under pressure

In contrast, the UK business remained under pressure: weak consumer sentiment, declining foot traffic, intense competition in online retail, and weaker demand for certain footwear lines weighed on performance. This was compounded by difficult year-over-year comparisons related to the 2024 European Football Championship, which had particularly boosted sales of replica jerseys in the previous year. As a result, organic sales in the UK declined by 2.5 percent.

JD Fascia number 1 in the portfolio

The differing performance across regions also highlights how broadly positioned JD Sports Fashion has become. The classic JD Fascia remains the key growth driver, with £7.95 billion (€9.22bn) in sales and organic growth of 2.9 percent. In addition, concepts such as Hibbett, DTLR, Shoe Palace, Courir, and Finish Line are part of the so-called “Complementary Athleisure” activities, which together generated £3.21 billion (€3.72bn) in revenue. The portfolio is complemented by sporting goods and outdoor concepts such as Sprinter, Sport Zone, and Go Outdoors, which generated £1.51 billion (€1.75bn) in revenue.

JD streamlines brand structure and store network

At the same time, JD is pushing ahead with its restructuring: While the integration of Hibbett in North America continues and is expected to generate synergies of more than $25 million (€23m), smaller concepts such as City Gear are increasingly being integrated into larger formats. At the same time, the British company is restructuring its business in Germany and Eastern Europe and optimizing weaker outdoor operations in its home market. With this multi-brand and multi-format strategy, JD aims to cover different target groups, price points, and regional market conditions, but is increasingly focusing on more profitable core markets and more efficient store formats.

Expansion in Southern Europe, restructuring in Germany

Within Europe, JD Sports Fashion intends to concentrate future investments specifically on markets with “the most runway for profitable growth”: These include, in particular, Poland, Italy, Iberia, France, Benelux, Greece, and Ireland. There, the British sporting goods retailer sees further potential for profitable expansion, greater economies of scale, and a stronger market position for its core brand. At the same time, however, a restructuring is underway in Germany and parts of Eastern Europe.

The group is reviewing underperforming locations there, closing stores, and adjusting cost structures. In Europe alone, JD recorded impairment charges and store-related restructuring costs of more than £60 million (€69.6m) in the fiscal year. This is due to weaker store productivity, changing consumer habits, and a stronger focus on more profitable core markets and larger, more efficient store formats.

Transformation continues

At the same time, the strategic focus is increasingly shifting from pure expansion toward productivity, efficiency, and cash flow. JD Sports Fashion is optimizing its store portfolio according to the principle of “fewer, bigger, better” and is increasingly focusing on larger flagship locations with higher space productivity. At the same time, the group is investing heavily in digital infrastructure, supply chain automation, and new e-commerce platforms. This includes, among other things, the further automation of the logistics center in Heerlen, Netherlands, which is set to play a central role in European fulfillment in the future.

Cautious outlook despite robust demand

Like many others, the British retail group is taking a very cautious view of 2026/27. It expects adjusted pre-tax profit to range between £750 million (€870m) and £850 million (€986m), citing continued weak consumer sentiment, cautious purchasing decisions, and ongoing uncertainties in the global sportswear market. In the footwear segment as well, the pressures from expiring product cycles of major brand partners are expected to persist.

At the same time, the group is expanding its use of artificial intelligence and data-driven personalization to improve conversion, inventory management, and customer loyalty. CEO Schultz emphasized that he intends to further accelerate the strategic priorities. “Whilst we continue to expect muted market growth in FY27, we remain confident in JD Group’s medium-term trajectory,” Schultz stated.

At the same time, he announced further measures to boost efficiency as well as continued high levels of investment in marketing, digital infrastructure, and the supply chain. The significant increase in free cash flow underscores that JD is increasingly focusing on operational efficiency and return on capital – and no longer solely on aggressive expansion.

Stock rises, but outlook dampens euphoria

The strong cash flow results and the announced share buybacks were initially well-received by the market. JD Sports Fashion’s stock rose by nearly 6 percent at times following the release of the figures, making it one of the strongest performers in the FTSE 100. At the same time, the reaction remained subdued, as the cautious outlook for 2026/27 underscored the ongoing uncertainties in the global sportswear market. For the first quarter, the sports fashion retailer also reported a 2.3 percent decline in like-for-like sales – a further sign that the group continues to operate in a challenging market environment.