JD Sports Fashion PLC (LSE:JD., OTC:JDSPY) shares jogged 3% higher to 70.02p after the retailer hiked its dividend 20% and launched a £200 million buyback, with cash flow for the past year stronger than expected despite tough trading that weighed on profits.
Revenue for the trainers and sportswear specialist rose 10.5% to £12.7 billion in the 52 weeks to end-January, helped by acquisitions.
Like-for-like sales fell 2.1%, bang in line with analyst forecasts, as weakness in the UK was offset by growth elsewhere. Footwear sales were flat, though clothing rose about 5%.
Profit before tax and adjusting items fell 7.7% to £852 million, versus the £850 million average City estimate. Statutory profit before tax dropped 12% to £629 million.
Free cash flow increased 36% to £462 million, well ahead of the £360 million consensus, with the year ending with £311 million of net cash before lease liabilities.
A dividend of 1.20p per share was proposed, up 20%, along with the new share buyback.
Chief executive Régis Schultz said the group delivered “a resilient performance” despite difficult markets.
Looking ahead, he said muted demand was still expected. Guidance was given for underlying PBT of £750-850 million for the 2027 financial year, with organic sales flat in the historically quiet first quarter.
"For the year ahead we are focused on further enhancing and optimising our product offer, customer experience and store footprint, and delivering strong cost and cash discipline - in essence, 'controlling the controllables'," said Shultz.
"These actions position us well to deliver on our new commitments on free cash flow and cash returns to shareholders announced today."
House broker Peel Hunt said the preliminary results "showcased a solid outcome to a year when underlying conditions were difficult but the company made good strategic progress".
Analysts flagged that the first three monmths of the year is normally a "small quarter" for JD and that the market has been "tricky so far", with US LFL sales down 0.6%, with UK/Europe both down 4% amidst weak footfall for all.
"Given the uncertainty that prevails across the retail sector in general, we are taking our numbers down 5% today, due more to external factors than company specifics."
** UPDATE: Adds share prices and broker comment **