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JD Sports Fashion has cautioned that the war in the Middle East could push up prices and weaken consumer demand if it leads to higher costs, as the retail giant reported a drop in its annual earnings.

The fashion and sportswear chain, which has 4,811 stores worldwide, said the uncertainty about the geopolitical situation could weigh on its profits in the year ahead.

JD said it had no “direct exposure” to the Middle East, and had only a handful of franchised stores in the region, and there had been no real impact on the business so far.

But the company said: “Over time, the potential future impacts of heightened uncertainty may contribute to direct cost pressures, including energy and fuel costs across our store and logistics networks, respectively, as well as potential indirect impacts on pricing and consumer demand should input cost inflation emerge.”

JD said that, as a result of the uncertainty, it was providing a wider range of profit guidance for the next financial year than it was previously planning.

It was now forecasting a pre-tax profit of between £750 million and £850 million.

This would mark a decline from the £852 million pre-tax profit that the company made for the year to the end of January 2026, which was down 6.4% compared with the previous year.

Total organic sales for the group, which excludes the impact of acquisitions, increased by 2.1% year on year to £12.66 billion.

But in the UK, it blamed a “tough consumer backdrop” for organic sales declining by 2.5%, and sales on a like-for-like basis dropping by 3.9%.

JD closed 24 stores, on a net basis, in the country over the past year as it pressed ahead with a focus on “fewer, bigger, better” shops.

Since the end of the financial year, JD said cold and wet weather had dampened sales and that trading in April was “volatile” with a strong Easter performance followed by fewer visitors to shops.

Regis Schultz, JD’s chief executive, said: “We delivered a resilient performance, achieving organic sales growth of 2.1% 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 (2027 financial year), we remain confident in JD Group’s medium‑term trajectory, underpinned by our strong brand partnerships and agile, multi‑brand model.”