JD Sports hikes dividend 20% and adds £200M buyback

JD Sports Fashion PLC (LSE:JD.) announced a 20% dividend hike and a £200 million share buyback after a resilient financial year with stronger-than-expected cash flow.

"For the year ahead we are focused on further enhancing and optimising our product offer, customer experience and store footprint, and delivering strong cost and cash discipline," Chief Executive Régis Schultz said.

The full-year dividend rises to 1.20p per share. The move comes as profit before tax and adjusting items fell 7.7% to £852 million, in line with forecasts, while free cash flow jumped 36% to £462 million.

The shareholder returns signal management's confidence despite forecasting muted demand ahead. The company guided for underlying PBT of £750-£850 million for the 2027 financial year, with a focus on "controlling the controllables."

Resilient Performance

For the 52 weeks to end-January, the sportswear retailer saw revenue climb 10.5% to £12.7 billion, aided by acquisitions. However, like-for-like sales declined 2.1% as weakness in the UK was offset by growth in other regions. Statutory profit before tax fell 12% to £629 million.

The company ended the year with £311 million of net cash before lease liabilities, a position strengthened by the significant increase in free cash flow which beat analyst consensus of £360 million.

Schultz said the group delivered “a resilient performance” in a difficult market. Looking ahead, he noted that muted demand is expected to continue, with organic sales forecast to be flat in the first quarter.

The announced dividend increase and share buyback signal management's confidence in the company's underlying financial health and future cash generation. Investors will watch for execution on cost discipline and footprint optimization in the coming quarters.

This article is for informational purposes only and does not constitute investment advice.