At its last update, JD Sports Fashion PLC did not provide the most bullish of guidance, couching a hesitant 'on track' outlook with an emphasis on the volatile market backdrop.
Last night's warning from Nike that upstart rivals were starting to take larger chunks out of its sales has already led to worries about the impact for stockists such as the FTSE 100 retailer, for which the US sportswear giant is a hugely important partner.
Shares in JD fell 5% to 120p in London and Nike's fell 14.5% premarket to $80.51.
The Beaverton, Oregon giant lowered its outlook for the current year and reported lower-than-expected sales for the past quarter, the end of its fiscal year.
"While we are encouraged by our progress, our fourth quarter results highlighted challenges that have led us to update our fiscal 2025 outlook,” Nike CEO Matthew Friend said.
The company did not provide details of its revised outlook in its earnings statement released shortly after Thursday's closing bell, though it said demand for its footwear was weak as consumers are tempted by newer brands, while its 'lifetyle brands' like Air Force 1 and Dunk sneakers had fallen for the first time since the pandemic.
As for JD, which has close ties with Nike for its UK and North American chains, its last update was the full-year results in May, where it maintained full-year guidance for adjusted profit before tax of £955-1,035 million for this year.
Analyst Jonathan Pritchard at Peel Hunt said there are a number of things to consider from JD’s perspective.
"Although Nike is clearly not in form right now, [JD] maintains strong relationships with brands that are currently successful (On Running, New Balance, HOKA), and the allocation of space ebbs and flows.
"JD continues to gain market share in this space, and we anticipate that Nike will need to rely more heavily on its wholesale partners, requiring merchandising assistance and stronger allocations away from its Nike Direct channels.
"There are always moments in the innovation cycle when one brand outperforms or underperforms others, but this doesn’t detract from the global appeal of this space.
"We would be inclined to view this as a buying opportunity: everything we see in JD stores impresses us at the moment, and the multiple is very attractive for such a strong global player with significant growth prospects, in our view."
In the coming week, JD holds its annual shareholder meeting, which might or might not include a short trading update.
Otherwise, its second-quarter trading update is due in August.