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JD Sports cuts profit forecast as trainer sales fall under inflation
The retailer now expects full-year pre-tax profits of £700m to £800m, down from its prior £750m to £850m range, and said like-for-like sales fell 3.1% in the second quarter.
JD Sports has cut its full-year profit forecast after cost of living pressures weighed on demand for trainers, with inflation hitting shoppers and dragging sales in key markets, particularly the United States, according to the Guardian Business.
The sportswear chain now expects pre-tax profits of between £700m and £800m for the year, after previously targeting £750m to £850m. It warned that the broader slowdown in consumer spending is likely to continue into the second half of the year, leading to lower-than-expected profits.
JD said it struggled to shift trainers and other footwear quickly in North America, where like-for-like sales fell 6.8% in the second quarter. Sales in Europe also declined, dropping 2.7% over the same period, with the UK described as a bright spot due to World Cup demand for football replica kits and higher outdoor gear purchases.
The company linked some cost pressures to higher fuel prices, which it said have been pushed up by the US Israeli war on Iran and the resulting stoppage of tanker traffic through the Strait of Hormuz. The downgrade contributed to a 12% drop in the London-listed shares to their lowest level since July.