It’s been a depressing time for the JD Sports activities Trend (LSE:JD.) share price. In October, the retailer was forecasting a revenue earlier than tax and distinctive gadgets of £955m-£1.035bn for the 12 months ended 1 February (FY25).

A month later, it warned that its end result can be on the “lower end” of this vary. After which in January — blaming a “challenging and volatile” market — it revised its estimate downwards to £915m-£935m.

Consequently, its share price is at present (3 March) round 50% under its 52-week excessive.

Don’t panic

As a shareholder, that is clearly disappointing. However in these circumstances, I take a look at different corporations in the identical sector to see how their share costs are performing.

For instance, since final March, JD Sports activities share price has tanked by 33%. Over the identical interval, Frasers Group, proprietor of rival Sports activities Direct, is down 22%, and Nike’s (NYSE: NKE) inventory price has fallen by 20%. This tells me that the sector as a complete is out of favour. I can chill out a bit now.

Nonetheless, take a look at its efficiency over a shorter time frame and a unique image emerges.

Nearer scrutiny

Since September, JD Sports activities and Frasers Group shares have fallen by 28% and 41%, respectively. Nonetheless Nike, the world’s largest sportswear model, has seen its inventory price fall by simply 2%.

This might be an indication that traders imagine the corporate’s self-inflicted issues — particularly, an absence of product innovation, unsuccessfully making an attempt to promote extra via its personal shops and transferring away from its sporting origins — are slowly being resolved.

Certainly, for the quarter ended 30 November, earnings per share (EPS) was $0.78, comfortably beating analysts’ expectations of $0.63.

For the 4 quarters to this date, EPS was $3.24. This implies the inventory trades on a historic price-to-earnings (P/E) ratio of 24.5, which could be very low by current requirements. For many of the previous 5 years, it’s been comfortably above 30.

Encouragingly, Nike’s new boss mentioned the corporate would supply “unwavering commitment to our wholesale partners”. This could solely be excellent news for JD Sports activities, which says the American sportswear big is its primary accomplice worldwide. Though not confirmed, it’s believed over 50% of the British retailer’s income is accounted for by Nike’s merchandise.

And this determine’s more likely to be greater now that it’s purchased Hibbett, which operates practically 1,200 shops in the USA.

For the JD Sports activities share price to get better, I imagine Nike should do higher.

Again in trend

It’s definitely making an attempt to. Final month, the American sportswear big introduced the upcoming launch of a “collaborative sub-brand” with Kim Kardashian, an enormous trend influencer and the celeb behind the Skims label. The primary assortment of NikeSkims ought to arrive shortly.

It’s all a part of the model’s technique to turn out to be extra related to girls. It follows on from its costly SuperBowl advert celebrating iconic feminine athletes.

However there’s extra to JD Sports activities than Nike. It sells quite a few manufacturers together with rising, fast-growing ones like HOKA and On Working. And but its inventory at present trades on a miserly 6.6 occasions forecast FY25 earnings.

That is regardless of the worldwide athleisure market predicted to develop by 9.2% a 12 months till 2034. And younger folks — who make up the majority of the patrons — view sportswear as their first alternative for spending their discretionary revenue.

General, I believe traders in search of a long-term development inventory may contemplate JD Sports activities.