JD Sports has wiped £50million from its full year guidance after group organic sales dropped by 1.3% - despite "strong football replica kit sales" in the UK.
Releasing its Q2 trading statement this morning, the sports fashion giant confirmed sales had declined by 1.3% worldwide, following a decline of 0.1% in Q1.
In North America, JD Sports saw a 4.5% drop in organic sales, while Europe suffered a less severe decline of 0.4%.
The UK only saw a 0.2% fall in sales, helped by football shirt sales and an improved outdoor business performance.
Asia Pacific saw sales grow by 10.2%, but that was not enough to stop the company downgrading its pre-tax profit full year guidance to between £700million and £800million.
It had previously been £750million to £850million.
Régis Schultz, CEO of JD Sports Fashion plc, 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. Europe's trend improved slightly versus Q1 against a still-subdued backdrop, supported by resilient Sporting Goods trading.
"Our focus remains on executing against our strategy, and growing our resilience through our increasingly diverse product and omni-channel offer - with growth in apparel and accessories sales, encouraging momentum in performance-based running and newer footwear styles, and online sales up 2.6%. Our store estate is also becoming more productive, with Group space growth contributing +2.1% to sales in H1 despite a lower store count.
"We continue to exercise strong cost and capital discipline across discretionary spend, store operating costs, inventory and capex, while also driving further supply chain efficiencies, including automation at our distribution centre in Europe.
"Our guidance reflects a pragmatic view of external market conditions, whilst our cost and capital discipline, coupled with the highly cash-generative nature of our model, keep us on track to deliver unchanged free cash flow of £460m to £520m. We remain confident in our long-term strategy and my thanks go to our colleagues worldwide for their continued hard work and focus."
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Companies reporting today
- Alibaba - Q1 Results
- Hays - Full Year Results
- JD Sports Fashion - Q2 Trading Statement