JD Sports cuts profit outlook as US sales slump and competition intensifies
The sports‑wear retailer trimmed its profit forecast to £700‑£800 million as a weak US market and aggressive discounting hurt earnings.
JD Sports announced on Thursday that it is lowering its pre‑tax profit target to a range of £700 million to £800 million, down from the previous ceiling of £850 million. The revision follows a sharper‑than‑expected slowdown in its US operations and heightened price competition across the sector.
Why the warning matters
Investors have been watching the group’s growth plan, spearheaded by chief executive Régis Schultz, for signs that the post‑pandemic athleisure boom can be sustained. The latest figures show like‑for‑like sales in the United States, which accounts for roughly 35 % of total revenue, fell 6.8 % in the second quarter, dragging the six‑month decline to 2.8 %. By contrast, the UK market posted a modest 0.8 % rise, helped by demand for replica football kits and outdoor apparel.
Trading in the second quarter remained tough.
Schultz added that rivals are turning to deep promotions to attract cash‑strapped shoppers, creating a “highly promotional” market that pressures margins. The company still expects free cash flow of £460 million to £520 million, but the profit cut underscores the difficulty of replicating the pandemic‑era growth in a tighter consumer environment.
Boardroom changes and next steps
Earlier this year, the group’s chair Andy Higginson resigned after a boardroom dispute over Schultz’s leadership. He was succeeded by former IKEA chief executive Peter Agnefjall, who now faces the task of restoring investor confidence.
Looking ahead, JD Sports expects the traditional back‑to‑school boost in the US to arrive later than usual, potentially softening the impact of the current sales dip. However, analysts warn that if the discounting trend continues, the retailer may need to revisit its pricing strategy or accelerate expansion in faster‑growing regions such as Asia Pacific, where sales rose 1.4 % despite representing only five per cent of total revenue.
Shares reacted sharply, falling more than 10 % to 83 p in early trading and marking a 30 % decline over the past year. The market will be watching the next earnings release closely to see whether the profit outlook can be steadied.
For a broader view of how profit forecasts are being trimmed across the sector, see Klarna’s recent revenue forecast cut.
