Already one of the cheapest stocks on the FTSE 100, a falling share price means this well-known name continues to offer even better value for money. Why don’t investors consider it a bargain?
Let’s take a closer look.
Who?
Shares of JD Sports Fashion (LSE:JD.), the self-styled ‘King of Trainers’, are now (12 July) changing hands for 57% less than they were five years ago.
With adjusted basic earnings per share (EPS) of 11.71p for the 52 weeks ended 31 January 2026 (FY26), the stock has a trailing 12-months price-to-earnings ratio of 7. In July 2021, it was 14.9.
In FY21, the sports retailer reported EPS of 12.84p. It appears as though the group’s gone backwards over the past five years. Investors prefer a good growth story. That’s why the stock keeps on getting cheaper.
What next?
However, it’s the future that really counts. Can the group start to grow again?
Significantly, after a major acquisition in 2024, North America’s now its biggest market and no longer entirely dependent on a sluggish UK economy. By contrast, the US is expected to grow over 2% this year.
But the group’s expecting like-for-like (LFL) sales to fall by 2.3% in FY27. In FY26, they fell 2.1%. This financial year, it’s anticipating free cash flow of £460m-£520m and an adjusted profit before tax of £750m-£850m. In FY26, these were £462m and £850m respectively.
No wonder the group’s share price has being stuck in the doldrums.
A big issue
One of JD Sports’ problems has been an over-reliance on Nike. The American sportswear giant is believed to account for around half of its sales. All search results on the company’s website return Nike at the top, with other brands following in alphabetical order.
Yet Nike’s struggled in recent years. A lack of product innovation and the emergence of new challengers and resurgent rivals has seen its share price tank. Although there are some signs that the business has stabilised, a recovery isn’t assured. Sales for the three months ended 31 May were 1% down on the same quarter a year earlier.
Still hope
But it doesn’t have to be like this. Adidas is booming at the moment. It reported a 14% increase in revenue during the first quarter of 2026, compared to the same period a year earlier. Operating profit was 16% higher.
Reports of the death of the athleisure market seem exaggerated. There’s talk that the key demographic of 18-to-24 year-olds is suffering as a result of AI destroying entry-level jobs. But with the right products, I think Adidas proves it’s still possible to grow.
On Running and Hoka are also doing well. Importantly, JD Sports sells all of these brands and more. Perhaps the time has come to quietly drop its emphasis on all-things Nike?
My view
Despite its troubles, I’m optimistic about the British retailer’s prospects. Analysts appear to agree. They forecast FY29 EPS of 13.65p. If correct, the stock trades on an incredibly-cheap 6 times future earnings.
Crucially, it remains cash generative, which gives the company an opportunity to invest to grow. Also, I’m confident that the World Cup has helped sales, particularly in North America.
On balance, I reckon JD Sports remains a cheap stock to consider.
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James Beard owns shares in JD Sports Fashion plc.
