JD Sports has cautioned that global sales have been dragged down by cost-of-living pressures such as higher fuel prices, despite a UK boost driven by demand for football kits.
The retail chain confirmed it is downgrading its profit outlook amid a "tough" market.
Like-for-like sales fell 3.1 per cent in the 13 weeks to August 1 compared with the same period last year. The downturn was most acute in North America, its largest market, where sales dropped 6.8 per cent year-on-year.
Squeezed consumer budgets hit footwear sales, particularly for hotly anticipated launches and limited-edition trainers, amid an increased level of discounting. This was partially offset by growing demand for running shoes and newer footwear styles.
In the UK, sales edged up by 0.8 per cent year-on-year, helped by stronger spending on outdoor-related products.
The firm also flagged a boost from football replica kit sales during the quarter while England and Scotland played in the group stages of the men’s football World Cup.
But across the first half of the year, JD Sports said weaker trading has reflected “incremental cost-of-living pressures on our core consumer from continued inflation including higher fuel prices”.
The retailer relies largely on non-essential spending by younger customers wanting the latest styles.
JD Sports said it was now expecting its pre-tax profits for the full year to come in between £700 million and £800 million, down from a previously guided range of £750 million to £850 million.
The company’s share price dropped by about 14 per cent on Thursday following the update.
Chief executive Regis Schultz, who has been driving the company’s turnaround, said: “Trading in the second quarter remained tough.
“The market stayed highly promotional, reflecting the consumer and footwear product cycle headwinds our industry has faced in recent quarters, whilst our core consumer was impacted by incremental cost-of-living pressures.
“North America saw the most acute impact, also reflecting a slower quarter for high-heat footwear product and the timing of back-to-school demand.
“The UK delivered a good quarter, with strong football replica kit sales and an improved performance in our outdoor business.”
Richard Hunter, head of markets at Interactive Investor, said: “Lower-income shoppers are under pressure due to rising energy costs and any cost-of-living demands on individual budgets, particularly in its core younger market.
“More positively, sportswear continues to take share within apparel due to rising participation in athletics, particularly among higher-income consumers who tend to have a greater propensity to spend regardless of the economic backdrop.”
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