JD Sports cuts profit outlook as US sales drop, shares tumble

By James Davey

LONDON, Aug 20 (Reuters) - British sportswear and fashion retailer JD Sports cut its profit outlook on Thursday after a slump in second-quarter sales in its key North American market, sending its shares sharply lower.

Shares in FTSE 100-listed JD, which makes over a third of its sales in North America, were down 12% in early trading, after it reported group like-for-like sales fell 3.1% in the 13 weeks to August 1, having fallen 2.5% in its first quarter.

They were down 6.8% in North America and 2.7% lower in Europe, but rose 0.8% in the UK and 1.4% in Asia Pacific.

WEAKER CONSUMER SENTIMENT IN U.S.

JD said its performance in North America reflected weaker consumer sentiment, a slower quarter for high-heat footwear products, and deferred back-to-school demand from July into the first half of August.

It said the footwear category remained soft across the group, given pressure on consumers and what it called "ongoing product cycle evolution" across key brand partners.

JD also highlighted a "highly promotional" market, "which may persist into H2."

It said apparel and accessories had a good performance in all regions, while the UK had strong soccer replica kit sales.

The group has lost nearly a third of its stock market value over the last two years, reflecting pressure on its core younger and less affluent customer base, a market driven by promotions, and a lack of innovation from Nike, which is resetting its business and accounts for more than 40% of group sales.

JD TAKES A 'PRAGMATIC VIEW'

JD is now forecasting a full-year 2026/27 profit before tax and adjusting items of between £700 million and £800 million ($952 million-$1.09 billion).

That compares with previous guidance of £750 million to £850 million and with £852 million made in 2025/26.

Prior to Thursday's update analysts were on average forecasting £781 million.

"Our guidance reflects a pragmatic view of external market conditions," CEO Regis Schultz said.

Investec analyst Kate Calvert said JD shares were unlikely to perform "until downgrades stop, excess stock is cleared and better Nike momentum is seen, which is unlikely until next calendar year in our view."

($1 = 0.7349 pounds)

(Reporting by James Davey; Editing by Kate Holton and David Holmes)