JD Sports cautions on unemployment as shoppers tighten belts

JD Sports warned that unemployment trends are moving in the wrong direction and said it remains cautious about trading in the second half of its financial year as cost-of-living pressures mount for shoppers. In the six months to Aug. 1, the retailer reported sales fell 2.5% to £5.94 billion, with UK revenue down 3.3% as higher living costs weighed on discretionary spending. Profit declined 13.5% to £351 million, even as the group maintained a broad footprint across North America, Europe and Asia alongside the UK.

Chief executive Regis Schultz told investors he is cautious about the year’s second half due to continued pressure on consumer finances and an elevated unemployment risk. He urged policymakers not to increase the cost of employing people, saying, “Don’t increase the cost of labour. Make sure that we keep competitive, keep the UK competitive in the world.” He also noted the broader sensitivity to macroeconomic conditions, including potential changes in fiscal policy. The firm declared an interim dividend of 0.33p per share and said the second £100 million tranche of its share buyback would begin soon. Shares in JD Sports traded lower, down about 0.7% on the day at 87.94p after a tougher year for investors who have seen the stock retreat roughly 43% over the past 12 months.

The company said sales were supported by its diversified geographic exposure, but results reflected ongoing macro headwinds. North America revenue fell 3.8%, and Nike products – which account for roughly 45% of JD’s sales – remained a major driver of demand. The retailer noted that Nike has been taking steps to revive momentum, with new product lines and a renewed focus on running footwear. Dominic Platt, JD’s finance chief, said Nike’s actions were “the right things” to reset demand and that JD would benefit as those efforts translate into consumer interest across its stores and online platforms.

The report underscored the uneven pace of recovery across markets. In the UK, performance was disappointed by tougher year-ago comparatives after football shirt sales benefited from Euro 2024, adding to the pressure on a high street still contending with inflation and rising living costs. However, analysts cautioned that the external environment could deteriorate further. Garry White, investment commentator at Charles Stanley, described the second half as potentially tricky and highlighted the hit to consumer confidence from inflation, a slowing economy and political uncertainties around fiscal policy. He noted the risk of a renewed squeeze on discretionary spending should the Budget provisions and tax considerations become more onerous.

Beyond the near term, JD Sports is pursuing a strategy that leans on its multi-region footprint to balance demand cycles, with the performance of Nike products and other major brands continuing to influence the trajectory of sales. The company’s earnings remain sensitive to macroeconomic developments, currency movements and shifts in retail demand for athletic and leisurewear. While the immediate outlook remains cautious, JD pointed to ongoing investments in its online platform, store network and product assortment as foundational to sustaining growth over the longer term. The firm also cited ongoing benefits from efficiency and cost-control measures designed to protect margins in a volatile consumer environment.

As the sector weighs the balance of supply chain dynamics, tariffs, and policy changes, JD Sports’ results illustrate the continued fragility of consumer spending ties to macroeconomic policy. The market’s reaction to the interim results suggested investors remain focused on the durability of the UK consumer and the speed with which brand partners like Nike can restore momentum in a softer-than-expected retail landscape. With its diversified geographies, JD remains positioned to weather near-term headwinds, but executives signaled that the coming months would require vigilance as unemployment trends and inflation carry into the autumn selling season.