British sportswear retailer JD Sports Fashion on Friday reported a 6.4% drop in first quarter sales in its home market, blaming a volatile clothing market, sending its shares sharply lower.
Shares in the FTSE 100 group, which sells Nike, Adidas, HOKA and other sports brands, were down 11% in early trading.
Chief Executive Regis Schultz said the outcome was in line with the group’s expectations and reflected strength in sales last year and the high proportion of clothing in its UK sales mix.
“Q1 was very strong last year,” he told reporters.
“In the UK we have a larger penetration of apparel which is more volatile,” he said, noting recent poor weather.
Schultz said that while promotional activity in the market “remained elevated” across all regions, in the UK JD Sports maintained “promotional discipline”, particularly online.
Industry data published on Tuesday showed British retail sales bounced back in May after a slump in April that could have been caused by the timing of Easter and bad weather.
JD Sports’ overall like-for-like sales were down 0.7% in the first quarter to May 4. They increased 14.5% in the same period last year.
The group did achieve underlying sales growth in its Europe and North America divisions.
Nike, JD Sport’s biggest brand, warned in March of lower sales in its first half as it battles newer competitors.
Schultz expects trading conditions to improve as the year progresses, helped by the Euro 2024 soccer championship and the Paris Olympics, softer comparative numbers with last year and an improving product pipeline towards the end of the year.
Despite the first quarter outcome, JD Sports reiterated its 2024/25 guidance for profit before tax and adjusting items of 955 million pounds to 1.035 billion pounds ($1.21-$1.32 billion).
It made 917.2 million pounds in its year to Feb. 3 2024 – in line with guidance, downgraded in a January warning, but down from the 991.4 million pounds made in 2022/23.
Last month, JD agreed to buy American athletic fashion retailer Hibbett Inc for about $1.08 billion.
