Sports fashion retailer JD has slashed its profit forecasts as cost-of-living pressures, fuelled by the US war on Iran, weighed on sales of trainers. JD Sports, which sells a range of sports brands including Nike and Adidas, said widespread inflation had hit shoppers’ wallets, resulting in falling sales across important markets such as the US, where it struggled to quickly shift trainers and other footwear. Bosses went on to warn that the wider drop-off in consumer spending would likely continue into the second half of the year, leading to lower-than-expected profits.
The sports retailer now expects pre-tax profits of between £700m and £800m for the full year, having previously hoped to reach £750m to £850m. The news led to a 12% drop in the firm’s London-listed shares, falling on Thursday morning to their lowest level since July. Overall, JD said its like-for-like sales fell by 3.1% in the second quarter, with its North America operations taking the biggest hit, falling by 6.8%.
Sales across Europe tumbled by 2.7% during the same period. The UK was a rare bright spot, as World Cup excitement drove sales of football replica kits, while consumers bought more outdoor gear, including from its high street brands Blacks and Go Outdoors. Susannah Streeter, chief investment strategist, at investment firm Wealth Club said: “JD Sports is offering another glimpse of the darkening clouds gathering over the US economy, with American shoppers looking considerably more cautious.
Consumers may still be spending, but they are becoming more selective about discretionary purchases, particularly when household budgets are already under pressure.”
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