The JD Sports activities Style (LSE:JD.) share price leapt 7% in early buying and selling at the moment (27 June) following the discharge of Nike’s outcomes for the yr ended 31 Could 2025. It’s believed that the American sportswear large accounts for round half of the UK retailer’s world income. This dependency means the share costs of the 2 have a tendency to maneuver in tandem.

Troublesome occasions

However Nike’s outcomes had been disappointing. In comparison with the earlier yr, income was down 10% to $46.3bn, web earnings was 44% decrease at $3.2bn, and diluted earnings per share (EPS) fell 42% to $2.16bn.

Nike’s president and chief government Elliott Hill acknowledged that the numbers “are not where we want them to be”. However regardless of the influence of tariffs on the group’s manufacturing operations in Asia, he was assured that the group’s turnaround plan will ship.

And buyers seem satisfied. Though poor, the outcomes had been higher than analysts had been anticipating. In after-hours buying and selling, the inventory was up over 10%.

Nearer to residence

Right this moment, this has prompted an analogous response on this facet of the Atlantic with the JD Sports activities share price being the highest performer on the FTSE 100. However the inventory stays 45% under its 52-week excessive and, for my part, continues to supply good worth for cash.

Analysts are forecasting EPS of 11.81p for the present monetary yr, which ends in January 2026. If appropriate, it means the inventory’s buying and selling on just below seven occasions ahead earnings.

That is low by historic requirements and doubtless displays issues concerning the fragility of the worldwide financial system. Discretionary spending is without doubt one of the first issues to be reduce throughout an financial slowdown. Though the athleisure market stays a agency favorite with the group’s goal of 16-24 year-olds, they’re simply as susceptible to a recession as another demographic.

Having mentioned that, regardless of Nike’s woes, it’s nonetheless in a position to command a a number of of 29 occasions its FY25 earnings.

Professionals and cons

Paradoxically, JD Sport’s determination to broaden abroad might harm it within the short-term. It now has 925 extra shops within the US than it does in Europe. JP Morgan reckons there’s a 40% probability of a recession in America this yr. To assist mitigate the influence of upper import taxes, Nike’s elevated the price of its costlier trainers. It stays to be seen how this may influence its prime and backside strains.

Nevertheless, JD Sports activities sells different manufacturers together with some scorching newcomers that want to disrupt the market (reminiscent of On). It has over 150 of them out there on its on-line retailer. And the group’s efficiently come by means of harder occasions earlier than, together with the pandemic. Income in its 2025 monetary yr was 85% increased than in 2021.  

To assist underpin future enlargement, the retailer retains a robust steadiness sheet and it’s anticipated to generate £1.2bn of working money move this yr. I additionally stay optimistic that Nike will return to development quickly. Provided that its model’s so robust, I believe it’s too early to put in writing off the group. As at the moment’s occasions have demonstrated, this could assist the JD Sports activities share price.

For these causes, buyers might think about including the UK sports activities retailer to their portfolios.