- First-quarter like-for-like sales fall
- Tariffs could push up prices
- Focus on controlling cost base
JD Sports Fashion (JD.) sank 7% to the bottom of the FTSE 100 on Thursday (21 May) after the ‘King of Trainers’ said first-quarter like-for-like sales to 13 May declined 2%, worsening the soft trading seen in the fourth quarter.
The sports apparel retailer also highlighted the potential impacts on consumer confidence from tariffs, warning that ‘in the short term, the cost of goods and services for US customers may rise to some degree’.
The shares have dropped by around 28% over the last year and are 9% lower year-to-date compared with a 6% advance for the blue-chip FTSE 100 index.
SOFTER TRADING
At its full-year results on 9 April JD Sports said it expected 2026 like-for-like sales to be below 2025 levels, so it is no surprise chief executive Regis Schultz put a brave face on current trading.
‘Overall trading in the first quarter of the new financial year has been in line with our expectations in a volatile market.
‘Despite this volatility, and uncertainty surrounding the impact of US tariff changes, we look forward into the medium term with confidence that we can continue to outperform the market, improve our profit margin and create significant value for our shareholders,’ added Schultz.
Regionally the group delivered like-for-like sales growth in Europe and the UK of 0.7% and 0.4% respectively, helped by good weather and easy comparatives.
Overall group sales growth was impacted by a 5.5% decline in US like-for-like sales which the company said reflects in part, a shift in the product launch schedule.
TARIFF HEADWINDS
Russ Mould, investment director at AJ Bell, put weakness in the shares down to a slow start to the new financial year and a potential hit to demand from tariffs.
‘The tariffs situation should not be a surprise to the market, yet the fact JD has spelled it out in its results has clearly spooked some investors.
‘Approximately 40% of JD’s sales come from the US and many products it sells are sourced from Asia, so it is in the firing line for tariffs. That means prices will inevitably go up and not all consumers will have the appetite or means by which to stomach these extra costs,’ added Mould.
Disclaimer: Financial services company AJ Bell referenced in the article owns Shares magazine. The author of the article (Martin Gamble) and the editor (James Crux) own shares in AJ Bell.
