JD Sports has warned that geopolitical uncertainty in the Middle East could weigh on profits, push up costs and weaken consumer demand, as the retail giant reported a fall in annual earnings.

The sportswear retailer said it had seen no material impact on the business so far and had “no direct exposure” to the Middle East, with only a small number of franchised stores in the region.

However, JD Sports cautioned that prolonged uncertainty could create cost pressures across the business, particularly through higher energy and fuel costs in its store estate and logistics network.

The group said this could also feed into pricing and consumer demand if input cost inflation begins to build.

As a result, JD Sports has widened its profit guidance for the year ahead, forecasting pre-tax profit of between £750 million and £850 million.

This would represent a decline from the £852 million pre-tax profit reported for the year to the end of January 2026, which was down 6.4 per cent on the previous year.

Group organic sales, excluding the impact of acquisitions, rose 2.1 per cent year on year to £12.66 billion.

However, performance in the UK remained under pressure, with JD Sports blaming a “tough consumer backdrop” as organic sales fell 2.5 per cent and like-for-like sales dropped 3.9 per cent.

The retailer closed 24 UK stores on a net basis during the year as it continued to focus on its “fewer, bigger, better” store strategy.

Trading since the end of the financial year has also been mixed, with cold and wet weather weighing on sales. JD Sports said April had been “volatile”, with a strong Easter performance followed by weaker footfall.

JD Sports chief executive Régis Schultz said: “We delivered a resilient performance, achieving organic sales growth of 2.1 per cent despite tough market conditions.

“Our deep understanding of our customers and lifestyle trends give us a clear view of how they want to shop and spend, allowing us to consistently deliver the right products, in the right places and at the right prices.

“Whilst we continue to expect muted market growth in FY27, we remain confident in JD Group’s medium-term trajectory, underpinned by our strong brand partnerships and agile, multi-brand model.”