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JD Sports cuts profit forecast by £50m citing Iran war-driven inflation
The retailer now expects full-year pre-tax profits of £700m to £800m, after previously guiding to £750m to £850m.
JD Sports cut its profit forecast by £50m, pointing to cost-of-living pressures intensified by the US war on Iran that have weighed on demand for trainers, particularly in the United States. The company said inflation has deterred spending by its core young shoppers and warned the broader pullback in consumer spending is likely to continue into the second half of the year, according to The Guardian Economics.
JD now expects lower full-year pre-tax profits of between £700m and £800m, down from its prior target range of £750m to £850m. The update followed a 14% drop in JD’s London-listed shares by Thursday afternoon trading, to their lowest level since May, as the market responded to weaker sales momentum.
In its quarterly trading update, JD reported like-for-like sales down 3.1% in the second quarter, with North America operations taking the biggest hit at -6.8%. Sales fell 2.7% across Europe, while the UK was a bright spot helped by World Cup demand for football replica kits and higher outdoor gear purchases.
JD attributed part of the pressure to higher fuel prices, which it linked to the US-Israeli war on Iran and the effective halt of tankers passing through the Strait of Hormuz. The company operates about 4,800 stores worldwide across brands including JD, Blacks, and Millets, and highlighted that its wider portfolio still could not fully offset weaker trainer sales in key markets.