Performance below guidance with consensus FY25 PBT downgrade of c4% expected Due to a challenging market environment where JD Sports decided not to join in promotional activity, management is now guiding for FY25 PBT and adjusting items to be between £915m and £935m, versus November’s guidance to be at the lower end of a £955m-£1,035m range (Visible Alpha consensus £963.6m; INVe £961.6) FY LFL sales are now expected to be flat (previously 1%) and gross margin flat. Guidance now includes £7m additional profit from the Courir acquisition, which was not in previous guidance, at the end of November. However, this is fully offset by an extra £6m acquisition related cost under IFRS16 for Hibbett and £2m higher FX than the £15m hit previously guided to. Looking into FY26, consumer spending/confidence does appear to have weakened in most markets. The NIKE reset will take time with newer product not likely to come through in volume, we believe, until the 2H of JD’s financial year. Therefore, we expect the consensus downgrade to be greater in FY26 than FY25 (FY26 consensus PBT £1,088m vs INVe £1,139m). Weakness seen across all key markets After a weak October (last month of Q3), Group organic sales were up 3.4% versus Q3 sales +5.4% (LFL -0.3%), with a stronger performance in December. LFL revenue across November/December was down -1.5%, in a challenging volatile, promotional market. December LFL revenue grew 1.5%, with LFLs +20% over the two peak weeks of Black Friday and the week before Christmas. Footwear sales grew and outperformed apparel, with stores outperforming the online channel. By region, LFLs were negative in the UK and US, with positive growth delivered in Europe and Asia. Gross margin is ahead of LY with FY gross margin expected to be in-line with FY24. The business exited the period with relatively clean stock which will be cleared by the end of the sale. Forecasts/TP placed under review JD’s shares are down 26%/16% over 3 months/12 months, The valuation (CY25E PE of 6.8x ex Courir) implies there is a credibility issue, and the market is likely to remain sceptical of short term expectations and to overlook the Group’s attractive long term growth opportunities, in our view. Evidence of better trading and market stability is probably needed before the material valuation gap is closed.