The proposed Hibbett acquisition was a surprise given the Group is yet to complete on Courir. Hibbett will be another complementary format which seems contrary to management’s ‘JD First’ strategy. However, in our view, the deal makes financial and strategic sense, adding scale to the Group’s North American business with little overlap. The business is being acquired on depressed earnings and should also benefit from any market recovery. Our scenario analysis suggests Hibbett could enhance FY26 earnings by 8%. Weaker FY25 guidance pre-Easter drives our 10%/9% downgrade in FY25E/FY26E PBT, before announced accounting changes for amortisation. Our forecasts do not include the proposed Courir and Hibbett acquisitions, which we estimate could offset our FY26E downgrade. NIKE’s lost innovation mojo is expected to hold back industry growth into 2025. While NIKE has guided to sales growth in the 12 months to end May 2025, it has said that 1H revenues (June to November) are expected to be down by a low single-digit amount with momentum building through 2024 and into 2025. Indeed, Adidas has said it still has too much stock in the US and so is likely to remain challenging into 2025. Valuation (CY25E PE 9x) suggests to us investors are questioning JD’s growth prospects and the achievability of its 5-year ‘JD First’ strategy set out in Feb’23. JD has effectively ‘lost’ 2 years of profit growth as a return to FY23 profit levels is not expected by consensus until FY26. While we believe valuation does not reflect the strength of JD’s market position, future growth potential or the benefits of the proposed acquisition, investors still need confidence around the industry rebound and future margin recovery potential.