JD Sports Fashion PLC (LSE:JD., OTC:JDSPY) shares fell on Wednesday after results from major partner Nike Inc (NYSE:NKE) pointed to weaker sales ahead and continued pressure on consumer demand.
The sports fashion retailer was down 2.3% at 82.78p, as investors read across from Nike’s fourth-quarter numbers overnight.
Nike reported quarterly net income of $1.07 billion, helped by a $986 million tariff-related refund. Without that boost, the trainer maker’s underlying performance remained weak.
Revenue was flat at $11 billion, the lowest quarterly figure since February 2022. China sales fell 17% on a currency-neutral basis, while its sportswear business declined by double digits globally.
Nike’s gross margin rose to 49.2% from 40.3%, but the company said margins would have been roughly flat without the tariff refund.
The bigger concern was guidance, as the Oregon sportswear giant maintained its forecast for flat earnings over the next two quarters, but said revenue would fall by low- to mid-single digits.
It blamed tariff risk, disruption in the Middle East and weak consumer sentiment linked to high oil prices. "The environment around us continues to be volatile," chief financial officer Matthew Friend said.
Analysts at Peel Hunt said: "In terms of read-across to JD, this is clearly not positive,".
The broker added: “We do not believe that is at significant risk, but consensus EBITDA of £786 million (PHe: £785 million), which is in the bottom half of the company's guided range, appears to be the right ballpark.”
"However, the risk is probably skewed slightly to the downside, absent a dramatic improvement in consumer confidence."
The broker reiterated its view that JD "remains, however, a very cheap stock, in our view, given its global position as the partner of choice for brands and consumers".
