UK's JD Sports says global sportswear market to remain highly promotional
Second quarter underlying sales up 2.4%
Maintains profit guidance for full year
Says macro environment remains "volatile"
Shares up 5.5%
Adds shares paragraph 2, CEO quotes paragraphs 7 and 8
By James Davey
LONDON, Aug 22 (Reuters) -British sportswear retailer JD Sports Fashion JD.L reported an improvement in sales in its latest quarter but said it was cautious on its outlook for the rest of the year with markets globally set to remain highly promotional.
The FTSE 100-listed group, which sells Nike, Adidas, On, HOKA and other sports brands and trades in 38 countries, said second quarter underlying sales rose 2.4% after falling 0.7% in thefirst quarter.
Shares jumped 5.5% on Thursday after the trading update.
"The global macro environment remains volatile and so we continue to be cautious on our outlook for the rest of the year," JD Sports said.
It did, however, say it remained on track to deliver full-year profit within its previous guidance.
The global sports fashion industry is seeing a slowdown this year and there is a high rate of promotional activity, particularly in the United States, as both Nike and Adidas look to reduce stock levels with discounts.
Nike, the world's biggest sports brand by revenue, warned in June its sales would fall this year, though No. 2 Adidas ADSGn.DE has fared better.
Prior to Thursday's update JD's shares had slumped 23% this year, reflecting a January profit warning and Nike's underperformance, though the retailer has recently been subject to some vague bid speculation, which it declined to comment on.
“The consumer is there, we don’t see any issue around the consumer," CEO Regis Schultz told reporters.
"Where we refer to volatile is more around the competitive environment and it’s about the promotional environment," he said, noting the group was planning for the balance of the year to see the same level of promotional activity in the market that it saw in the first half. JD Sports' gross margin fell 10 basis points to 48.3% in that period.
JD Sports said UK like-for-like sales fell 0.8% in the second quarter to August 3, having been down 6.4% in the first quarter. They were up 5.7% in North America, up 3.0% in Europe and up 0.1% in the Asia Pacific region.
The trading period included the Euro 2024 soccer championship, which generated record sales of replica shirts, and the start of the Paris Olympics.
For full-year 2024/25, JD Sports is forecasting a profit before tax and adjusting items of 955 million pounds to 1.035 billion pounds ($1.24-$1.35 billion), up from the 917.2 million pounds made in 2023/24.
Reporting by James Davey; Editing by Kate Holton and Ana Nicolaci da Costa
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