JD Sports Share Price Drops Despite Earnings Beat

JD Sports Fashion (LON: JD.) shares dropped by 5% on Wednesday despite the company reporting strong interim results.

The stock is currently trading at 142p per share after closing Tuesday's session at 149.5p.

The retailer posted adjusted pre-tax profit of £405.6 million for the 26 weeks ended 3 August 2024, surpassing analyst expectations of £384 million. However, statutory profit before tax dropped 64.3% year-on-year to £126.3 million.

Revenue for the period came in at £5.05 billion, up 5.2% compared to the same period last year.

Looking ahead, JD Sports said it expects currency headwinds to reduce its profit before tax and adjusting items by £20 million in the second half of the year. The company also said that it expects Hibbett, Inc., which it acquired in August, to contribute around £25 million to its profit for the full year.

JD Sports kept its full-year profit before tax and adjusting items guidance range of £955 million to £1.035 billion.

Despite the challenges, JD Sports remains confident in its long-term growth prospects. The company said that it is well-positioned to continue growing its market share in the global sportswear market.

“We have today reported record interim results with Group revenue of £5.0bn, and Profit before tax and adjusting items of £405.6m, underscoring our ability to outperform the sector in a volatile global marketplace,” said Régis Schultz, Chief Executive Officer of JD Sports. “Our success is a direct reflection of the strength and agility of our global, multi-brand strategy, which allows us to adapt swiftly to fast-changing industry trends across the world, and our operational excellence.”

Schultz added that following the acquisition of Hibbett Inc, the company is well-positioned to continue growing share in North America, the world's largest sportswear market.