JD Sports Lifts Dividend and Launches £200M Buyback After ‘Resilient’ Year
JD Sports Fashion PLC (LSE:JD., OTC:JDSPY) has raised its dividend by 20% and announced a £200 million share buyback, after generating stronger-than-expected cash flow in a year marked by cautious consumer spending and margin pressure.
Revenue for the sportswear giant rose 10.5% to £12.7 billion in the 52 weeks to the end of January, helped by acquisitions. Like-for-like sales fell 2.1%, in line with analyst expectations, as weakness in the UK was offset by growth in international markets. Footwear sales were flat, while clothing posted a 5% increase.
Pre-tax profit before adjusting items fell 7.7% to £852 million, just above the City consensus of £850 million. Statutory pre-tax profit dropped 12% to £629 million. Free cash flow, however, jumped 36% to £462 million, well ahead of the £360 million forecast, leaving the company with £311 million in net cash before lease liabilities at year-end.
Chief executive Régis Schultz described the performance as “resilient” in a difficult market. “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’,” he said.
Looking forward, JD Sports expects muted demand to persist. The company guided for underlying pre-tax profit of between £750 million and £850 million for the 2027 financial year, with organic sales expected to be flat in the traditionally quiet first quarter.
The dividend hike and buyback signal confidence in the company’s ability to generate cash even as the broader retail sector faces headwinds from inflation and shifting consumer habits. Analysts note that JD Sports’ strong brand relationships and global footprint give it a buffer that many rivals lack.
“It’s a solid result in a tough climate, but I’m not popping champagne just yet,” said Mark Henshaw, a retail analyst at London-based consultancy Stonebridge. “The flat footwear sales are a worry — sneaker fatigue is real, and JD needs to find the next big thing.”
More blunt was Sarah Okonjo, a former retail buyer and now a consumer commentator. “A 20% dividend hike? Great for shareholders. But let’s be honest — this is a company that’s buying its way to growth with acquisitions while organic sales are flat. That’s not resilience, that’s a Band-Aid,” she said.
On the other hand, David Chen, a portfolio manager at Greenfield Asset Management, took a more measured view. “JD Sports is doing what it should: returning cash to shareholders while keeping an eye on costs. In this environment, that’s a sign of discipline, not desperation.”
The company’s shares rose modestly in early trading as investors welcomed the capital return plans, though some caution remains over the muted outlook for the first quarter.