Good Thursday - guidance less bad than feared JD Sports'' FY25 guidance was better than feared. Management expects a sequential improvement through the year, as market conditions and product newness improve, and reiterated its growth strategy. Our underlying forecasts still fall, albeit optically not materially, due to a change in accounting treatment. Our DCF-driven target falls because the net cash pile is smaller than hoped, but we see plenty of scope for the shares to re-rate further - we maintain our Outperform rating. A challenging sports arena, but strategy on track As other retailers and brands have commented, current conditions remain challenging in sporting goods. However, JD has a number of drivers, including new store roll-out, JD format conversions, a new loyalty programme, faster online fulfilment in Europe, growth through smaller brands (e.g. encouraging trial with Hoka), and a supply agreement with Nike. The ''terrace'' trend is still resonating strongly at its high-heat store fascia, size?, which is a good sign for the longevity of the trend. FY Feb-25 guidance, consensus likely to fall c.6% underlying Management guided FY Feb-25 LFL sales growth of +1% to +4%, and this variance is the main determinant of the profit range provided. Management guided Adj. PBT of GBP 900-980m but will now treat acquisition intangibles as an adjustment and so the ''new money'' range is GBP 955-1,035m. We cut from GBP 1bn to 925m on the old basis, or to GBP 980m on the new basis. Kicking on ... the dust has begun to settle As a result of the new definition of Adj. PBT our forecasts fall minimally. On these forecasts, the stock (at GBp c.135 intraday) trades on CY24 P/E c.10x, or c.9x ex-cash. Our target price falls to GBp 170 (from GBp 180), which implies that in one year''s time JD would trade on c.12.5x forward earnings. Such a re-rating may still seem remote, but we think there could be a number of catalysts, e.g. balance sheet usage, more regular...