JD Sports is heading into a crucial trading update with investors looking for evidence that chief executive Regis Schultz’s turnaround strategy can withstand weaker consumer spending, a slowing sportswear market and recent turmoil in the retailer’s boardroom.
Schultz is due to unveil second-quarter trading figures on Thursday, August 20, in what could prove an important moment for his leadership after a difficult period for the group.
Shares have fallen about 15 per cent since Schultz took the helm in 2022, although they have recovered almost 10 per cent since the start of this year. The rebound gives management some breathing space, but expectations remain high for evidence that the recovery is becoming more durable.
The company was rocked earlier this year by reports that former chairman Andy Higginson had sought support from fellow directors to remove Schultz. Higginson subsequently resigned in April and was replaced by Peter Agnefjäll, the former Ikea chief executive.
Schultz retains the backing of JD’s majority shareholder, Pentland Group, controlled by the Rubin family. But Thursday’s figures will provide a fresh test of whether that support can be translated into stronger investor confidence.
JD has already warned that annual pre-tax profits are likely to fall from £852 million last year, forecasting a range of £750 million to £850 million. Investors will be watching closely for any narrowing of that guidance — or, more importantly, an upgrade.
The wider sportswear market has proved more resilient than parts of fashion, but signs of weakness among major suppliers including Nike have heightened concerns over demand.
Investec analysts expect JD’s revenue growth to have slowed in the latest quarter.
The pressure is particularly acute among JD’s younger, lower-income customer base, which is vulnerable to higher household bills. Richard Hunter of Interactive Investor said the Middle East conflict could feed through indirectly via inflation and energy costs.
For Schultz, the message from Thursday’s update will need to be clear as JD is either emerging from its strategic turbulence — or investors are being asked to wait still longer for the turnaround.
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