JD Sports Fashion plc (LON: JD) shares fell sharply on Thursday after the retailer cut its full-year profit guidance following weaker second-quarter trading and continued pressure on consumer spending.
Group organic sales declined 1.3% in Q2, worsening from a 0.1% fall in the previous quarter, while like-for-like sales dropped 3.1%.
North America was the weakest region, with organic sales down 4.5%, while Europe fell 0.4% and the UK declined 0.2%. Asia Pacific was the standout performer, growing 10.2%.
JD Sports now expects full-year profit before tax and adjusting items of £700 million to £800 million, down from previous guidance of £750 million to £850 million.
The company maintained its free cash flow forecast of £460 million to £520 million, but warned that subdued consumer spending is likely to persist into the second half of the year.
JD Sports said widespread inflation was squeezing consumers’ disposable income, contributing to weaker demand across key markets. The pressure was particularly evident in the US, where the retailer struggled to shift trainers and other footwear as quickly as expected.
The company, which stocks major brands including Nike and Adidas, warned that the deterioration in consumer spending could persist during the second half of the year, contributing to its decision to lower full-year profit guidance.
The profit warning sent JD Sports to the bottom of the FTSE 100, with shares falling by around 11% to 16% in early trading.
