Shares in JD Sports dropped by over 14% as the sports retailer stated that its footwear division "remained soft given consumer pressures" in the second quarter.

The firm recorded a 3.1% decline in like-for-like (LFL) sales across the group in Q2, while H1 LFL sales fell by 2.8% year-on-year.

The firm said ongoing product cycle evolution across key brand partners also impacted results, amid a promotional market.

Its UK sales performance improved in Q2, driven by apparel and accessories, including strong football replica kit sales, as well as improved outdoor business performance. Its Europe division also saw an improved sales trend against a more subdued consumer backdrop.

However, it said its North American division’s sales performance reflected weaker core consumer sentiment, with a slower quarter for high-heat footwear products, and deferred back-to-school demand from July in to the first week of August.

CEO at JD Sports Fashion, Régis Schultz, 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."

In its outlook, JD Sports has lowered its profit guidance for the full-year, following its H1 underlying sales trends and the promotional market backdrop.

As a result, it now anticipates its full-year profit before tax to land between £700m to £800m, having previously been listed at between £750m and £850m.

However, it does remain on track to deliver a free cash flow of £460m to £520m.

Head of markets at AJ Bell, Dan Coatsworth, stated: "JD Sports picked the wrong time to go big in America. The acquisitions of Finish Line, Shoe Palace and DTLR between 2018 and 2021 were designed to supercharge its footprint in the US, and the group now derives 40% of its sales from the region.

"Unfortunately, this positioned JD in the crossfire of Trump’s punishing tariffs which pushed up the cost of the multitude of shoes made in Asia. A more cautious consumer has also weighed on sales, and the trend for people rushing to buy high-end footwear has lost momentum. Limited edition trainers used to be all the rage, but demand has now slowed.

"The trading update amounts to yet another setback for JD. There is only so long that shareholders will stay patient, and time is running out for chief executive Regis Schultz to whip the company back into shape. JD’s share price has fallen by 27% since he began as CEO in September 2022 versus a 50% rise in the UK’s FTSE 100 index. That’s a significant level of underperformance."

---