JD Sports share price has risen by 36% over the past three months, yet the company continues to grapple with profit pressures amid reduced consumer spending and economic uncertainty.
The stock had fallen by 50% over five years to 88p per share before the recent recovery.
Demand for premium-priced trainers, especially among younger consumers, has weakened due to inflation and rising youth unemployment in the UK.
Footwear accounts for 60% of JD Sports' sales. Higher living costs have pushed many shoppers to seek bargains, hitting the company's core product category hard.
Youth unemployment in the UK climbed to 16.4% between March and May 2026, adding financial strain on JD's primary customer base.
In the first quarter of 2026, JD Sports reported a 2.3% decline in like-for-like sales.
However, total revenue increased to £12.7 billion, driven by acquisitions in the US and France.
Management forecast pre-tax profits between £750 million and £850 million for the full year, down from £852 million the previous year.
Investment expert Mark Rogers noted that JD Sports shares have been undervalued, with a price-to-earnings ratio as low as six in recent months.
"The shares are up 36% in the last three months and, while I'm still nursing a paper loss, I'm edging closer to breaking even," he said.
Rogers highlighted positive recent results, including revenue growth, increased free cash flow, and a higher dividend.
Despite these positives, Rogers cautioned that the stock's recovery depends on broader economic factors such as inflation and consumer confidence, which could be affected by global events like the Iran conflict.
Analysts currently rate JD Sports as a Buy or Hold, with an average price target of 104p, implying potential gains of 17% over the next year.
JD Sports' heavy reliance on Nike, which accounts for nearly half of its sales, adds vulnerability.
Nike's own share price has dropped by about 76% since late 2021, reflecting a global trend of reduced discretionary spending on high-end sportswear.
The retail sector faces challenges from inflation, wage pressures, and shifting consumer behavior. JD Sports' UK operations are especially affected by increased National Insurance and minimum wage costs.
North American profits, which represent around 45% of the total, are also under pressure due to similar economic factors.
