Sales of trainers dive as cost of living pressures hit JD Sports performance

Sports fashion retailer JD has slashed its profit forecasts as cost-of-living pressures, fuelled by the US war on Iran, weighed on sales of trainers.JD Sports, which sells a range of sports brands including Nike and Adidas, said widespread inflation had hit shoppers’ wallets, resulting in falling sales across important markets such as the US, where it struggled to quickly shift trainers and other footwear.Bosses went on to warn that the wider drop-off in consumer spending would likely continue into the second half of the year, leading to lower-than-expected profits. The sports retailer now expects pre-tax profits of between £700m and £800m for the full year, having previously hoped to reach £750m to £850m.The news led to a 12% drop in the firm’s London-listed shares, falling on Thursday morning to their lowest level since July.“Trading in the second quarter remained tough,” the chief executive, Régis Schultz, adding that the company had been forced to slash prices and offer promotional sales to compensate, as “our core consumer was impacted by incremental cost-of-living pressures.”Adidas, Nike and New Balance shoes at a newly renovated JD Sports store at Westfield Stratford, London. Photograph: Hollie Adams/ReutersThe company, which runs 4,800 stores worldwide including the JD, Blacks and Millets chains in the UK, said pressures included higher fuel prices, which have been pushed up by the US-Israeli war on Iran which has effectively stopped tanker traffic through the Strait of Hormuz.Overall, JD said its like-for-like sales fell by 3.1% in the second quarter, with its North America operations taking the biggest hit, falling by 6.8%. Sales across Europe tumbled by 2.7% during the same period.The UK was a rare bright spot, as World Cup excitement drove sales of football replica kits, while consumers bought more outdoor gear, including from its high street brands Blacks and Go Outdoors.skip past newsletter promotionafter newsletter promotionSusannah Streeter, chief investment strategist, at investment firm Wealth Club said: “JD Sports is offering another glimpse of the darkening clouds gathering over the US economy, with American shoppers looking considerably more cautious.“The sneaker is fast becoming a canary in the coal mine for confidence,” she said. “More consumers are resisting the lure of hyped brands, which is not surprising when the jobs market is weakening and inflation is still such a concern. Consumers may still be spending, but they are becoming more selective about discretionary purchases, particularly when household budgets are already under pressure.”