JD Sports Fashion has warned that escalating tensions in the Middle East could add cost pressures and weaken consumer demand, as the retailer reported a fall in annual profits and flagged a more uncertain outlook for the year ahead.
The sportswear giant, which operates 4,811 stores worldwide, said it has no direct exposure to the region and only a limited franchised presence there, with no material impact on trading so far.
However, it cautioned that prolonged geopolitical instability could filter through global supply chains and operating costs, potentially affecting energy and fuel prices across its logistics and store network.
In its annual report, JD said that while the situation had not yet materially affected performance, “heightened uncertainty may contribute to direct cost pressures” and indirect impacts on consumer demand if inflationary pressures return.
The warning comes against the backdrop of ongoing volatility in global energy markets following conflict in the Middle East, which has driven swings in oil prices and raised concerns about wider inflationary spillovers.
JD said such pressures could affect transport and distribution costs and influence how much consumers are willing to spend on discretionary goods such as sportswear and footwear.
As a result, the company has widened its profit guidance range for the next financial year, now expecting pre-tax earnings of between £750m and £850m. That compares with £852m reported for the year to January 2026, a decline of 6.4pc year-on-year.
The group reported total organic sales growth of 2.1pc to £12.66bn, but performance in its core UK market remained under pressure, with sales falling 2.5pc on an organic basis and 3.9pc like-for-like.
JD attributed the domestic decline to a “tough consumer backdrop”, as cost-of-living pressures continue to weigh on household spending. The company has also closed a net 24 stores in the UK as part of a strategy focused on fewer, larger and higher-performing locations.
Recent trading has remained mixed, with the retailer reporting that unusually cold and wet weather dampened sales after the end of the financial year, while April trading was described as volatile, boosted temporarily by Easter before footfall weakened.
Chief executive Regis Schultz said the group had delivered a “resilient performance” despite challenging conditions, supported by its multi-brand model and close relationships with global sportswear partners.
“Our deep understanding of our customers and lifestyle trends allows us to consistently deliver the right products, in the right places and at the right prices,” he said.
Looking ahead, JD expects only muted market growth in FY27, but said it remained confident in its medium-term prospects, underpinned by brand partnerships and an agile retail model.
The update adds to a growing list of consumer-facing businesses warning that geopolitical instability, alongside persistent inflationary pressures, could complicate trading conditions even in markets far removed from the conflict itself.
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