Down but not out JD Sports shares have underperformed its retail peers year to date as consensus earnings estimates have fallen. Investor concerns include industry inventory overhangs, JD Sports'' exposure to Nike whose brand heat seems to have cooled, and the use of the balance sheet on acquisitions. We address these debates and argue that the industry outlook is improving, JD''s multi-brand format gives it scope to grow, and that MandA makes strategic and financial sense. On broadly unchanged forecasts, we continue to argue for a multiple re-rating and reiterate our Outperform rating. Debate #1: Industry Inventory levels Elevated inventory levels have pressured gross margins and also restricted product newness. We argue that inventories are close to normalising and that this should support profitability in the quarters ahead as markdown levels also normalise. Debate #2: Dependence on Nike Nike is JD Sport''s most important brand supplier, at c.55-60% of JD Sports'' sales, and JD is Nike''s largest wholesale customer. Nike''s brand heat cooling will affect JD, but we think that other brands will enable JD to grow like for like sales. JD''s North America LFL of +2% in Q1 reassures us. Debate #3: Growth agenda JD should be able to deliver at least 5%pa sales growth from net new space over the coming years. In addition, the proposed acquisitions of Hibbett, Inc. and Groupe Courir could add c.6% to earnings pre-synergies. We dive into the US market and argue that MandA makes strategic and financial sense. Reiterate Outperform We adjust our forecasts for new segmental disclosure, leaving them broadly unchanged. We think that JD Sports shares remain attractively valued, trading at CY25 P/E 8.7x. We continue to argue for a multiple re-rating and reiterate our Outperform rating with an unchanged TP of GBp 170.