Since November 2024, the JD Sports activities (LSE:JD.) share price has been the worst performer on the FTSE 100.

After two income warnings, almost 25% has been wiped off the market cap of the sports activities style retailer. As a shareholder, I really feel the ache.

Nonetheless, I’ve no plans to promote my shares. I imagine the inventory at present presents super worth for cash. And I’m anticipating large issues over the following few years.

I’m not alone. In January, the corporate’s chief govt purchased £99,000 of the inventory at a mean price of 90p.

What’s occurring?

The retailer’s current issues have been blamed on a “volatile trading environment”. The UK economic system’s struggling to develop and shopper confidence seems low.

To compound issues, the rise in employer’s Nationwide Insurance coverage Contributions can have a big impression on the corporate’s backside line. Satirically, the chairman of JD Sports activities was considered one of 120 enterprise leaders who signed a pre-election letter endorsing the Labour Celebration’s financial insurance policies, and calling for a change of presidency. As they are saying, watch out what you would like for!

The inventory additionally seems to have been caught within the crossfire ensuing from issues at Nike (NYSE:NKE). Because the chart beneath reveals, actions within the share costs of the 2 corporations seem to intently mirror each other.

It’s believed that round half of JD Sports activities income comes from the sale of the American sportswear big’s merchandise. However a failure to innovate — and a poor determination to attempt to promote extra product on to customers — has precipitated Nike’s gross sales to fall.

Nonetheless, I believe the worst could possibly be over for the American icon. Though its inventory is down 31% over the previous 12 months, it’s ‘only’ fallen 6% over the previous six.

The British retailer has lately purchased Hibbett (within the US) and Courir (in Europe), which implies it now has 4,451 shops worldwide. This could assist cut back its publicity to the sluggish UK economic system.

Superb worth

However I’m optimistic.

The corporate sells different manufacturers — together with Adidas — which are doing effectively.

It additionally refused to have interaction in discounting throughout the Christmas buying and selling interval. This helped enhance its margins.

Encouragingly, in December 2024 — the latest interval for which the corporate has disclosed any data — like-for-like gross sales had been 1.5% greater than for a similar interval in 2023.

And with the autumn within the JD Sports activities share price, I believe it could possibly be the perfect cut price on the FTSE 100.

For the 12 months that ended 1 February 2025, the corporate has been forecasting an adjusted pre-tax revenue of £915m-£935m. On the decrease finish of this vary, earnings per share might be 12p.

This implies the inventory at present (14 February) trades on a ahead price-to-earnings (P/E) ratio of seven.3. That is low by historic requirements. Lower than 4 years in the past, it was over 18.

I discover it laborious to imagine that the inventory’s solely 16% greater than its post-pandemic low, a interval when it was compelled to shut its doorways and its future was very unsure.

The sports activities leisure market stays big. It’s estimated to be price $220bn, with youthful folks being a key demographic. In line with JD Sports activities, 16 to 24-year-olds contemplate sportswear as their primary alternative on the subject of spending their discretionary revenue.

For these causes, I believe it’s a beautiful inventory to think about for bargain-hunting worth buyers.