JD Sports has reported that cost-of-living pressures, including higher fuel prices, have weighed on its global sales, even as demand for football kits provided a lift in the UK. The retail chain said it was downgrading its profit outlook in a "tough" market.
Sales Decline and Market Challenges
JD Sports reported a 3.1% decline in sales over the 13 weeks to August 1, compared like-for-like with the same period last year. The drop was particularly sharp in North America, its biggest market, where sales fell by 6.8% year-on-year.
The company said pressure on consumer spending hit footwear sales, especially for highly anticipated launches or limited-edition trainers, amid an increased level of discounting. This was partially offset by stronger demand for running shoes and newer footwear styles.
UK Performance and Football Kit Boost
In the UK, sales edged up by 0.8% year-on-year, helped by stronger spending on outdoor-related products. The firm also flagged a boost from football replica kit sales during the quarter, while England and Scotland played in the group stages of the men's football World Cup.
Across the first half of the year, JD Sports said weaker trading reflected "incremental cost-of-living pressures on our core consumer from continued inflation including higher fuel prices." The retailer relies largely on non-essential spending by younger customers wanting the latest styles.
Profit Outlook Downgraded
JD Sports said it now expects its pre-tax profits for the full year to come in between £700 million and £800 million, down from a previously guided range of £750 million to £850 million.
Chief executive Regis Schultz, who has been driving the company's turnaround, said: "Trading in the second quarter remained tough. "The market stayed highly promotional, reflecting the consumer and footwear product cycle headwinds our industry has faced in recent quarters, whilst our core consumer was impacted by incremental cost-of-living pressures. "North America saw the most acute impact, also reflecting a slower quarter for high-heat footwear product and the timing of back-to-school demand. "The UK delivered a good quarter, with strong football replica kit sales and an improved performance in our outdoor business."
