The FTSE 100 has been in sprightly form in 2025 so far. Sadly, not every member of the index has been in such fine fettle. I’m talking about JD Sports Fashion (LSE: JD) shares.
Shockingly poor performance
A fall of 15% since markets re-opened in January makes this one of the worst-performing top-tier stock in 2025 so far. Put another way, if an investor had put in £10,000, they’d be sitting on around £8,500 today.
If you think that’s bad, spare a thought for those who snapped up the shares 12 months ago. The price is down almost 30% over that period. Over five years, the company has nearly halved in value!
Granted, investors would have received dividends over those longer periods. But JD Sports’ growth-focused strategy means that it’s never been one to get excited about from an income perspective.
Right now, the yield sits at just 1.3% for FY26. A bog standard savings account would generate far more in interest without any of the risk that comes with investing.
Green shoots?
To be fair, all retailers have faced multiple headwinds for a long time, including a global pandemic and a cost-of-living crisis. On the downside, there are plenty of reasons to think that things could get even worse before they get better.
Inflation is creeping back up and consumer confidence remains fragile at best. We know that at least one of the key brands that the company sells — US trainer titan Nike — has lost some share to more innovative rivals too. On top of all this, higher National Insurance contributions from April will end up costing the firm millions of pounds.
But I still think JD has a lot going for it.
The company is continuing to expand overseas, making it increasingly less dependent on sales in its home market. The capture of Hibbett in the US, for example, will give it a much more prominent footprint across the pond. I also like the fact that this is not a company that engages in indiscriminate discounting to match rivals. This helps to maintain brand value and support profitability over the longer term.
There are a couple of other things that some retail investors might not know.
First, there’s very little interest in this stock from short sellers — traders who are betting that a company’s share price has further to fall. Second, CEO Regis Schultz has recently added to his own holding to the tune of £100,000.
Both of the above make me cautiously optimistic that the worst might be over.
Screamingly cheap!
Sure, JD Sports shares have been a dog of an investment for some time. But history shows that putting money to work when things are least comfortable has the potential to deliver outsized profits. I’d say we’re there now.
An update on trading in the fourth quarter is due near the end of March. While it’s possible that the shares could sink even lower, there’s also a chance that they could explode upwards if things are even marginally better than expected.
Although no one knows for sure, I’m inclined to think it will be the latter. The shares already trade at a very low forecast price-to-earnings (P/E) ratio of just over six.
Consequently, I reckon JD Fashion shares are worth considering today.
