JD Sports’ UK business has been hit by falling sales after disruption in the Red Sea stalled deliveries and the cold, wet spring reduced demand for camping kit and clothing.
The retail group, which owns Millets and Blacks in the UK, said sales at the outdoor kit chain were down 5.3% in the six months to 3 August as “key product lines” had been affected by Houthi attacks off Yemen delaying or rerouting shipping and the early date of Easter fell outside the camping season for the first time since 2018.
It said poor weather had compounded the issue, reducing demand for seasonal outdoor living products such as tents and camping equipment.
The chilly and wet weather also hit the group’s main JD sportswear chain in the UK, where sales at established stores were down 4.6% in what the group described as a “challenging and often volatile UK market”.
JD said discounting in the market had soared after “unfavourable spring and early summer weather conditions, dampened footfall and full price demand for seasonal [clothing]”.
While strong sales of replica football kits during the men’s European Championship helped boost top-line performance, the reliance on these low-margin items hit profits – which were down 14%.
Shares in JD Sports, which also owns Sprinter in Europe and Finish Line in the US, where it has bought Hibbett, fell 4.5% in early trading on Wednesday. The poor UK performance added to fears about the athleisure market, stoked by Nike reporting a 10% dive in global quarterly sales on Tuesday.
Régis Schultz, the chief executive of JD Sports, said he remained confident about the wider sportswear and athleisure market and JD’s ability to outperform because of its multi-brand, multi-country mix.
“[The sportswear market] has years of structural growth ahead of it, with favourable trends like casualisation and active lifestyles continuing,” he said.
Schultz said he was looking forward to working with Nike’s incoming chief executive, adding: “We see Nike coming back. Nike will be fine. Nike is a strong brand.”
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The UK sales fall was mainly caused by the weather, Schultz said, and “nothing linked to the consumer [sentiment]”. Vintage running gear was expected to be a big trend in the run-up to Christmas, spreading beyond the revival of the Adidas Gazelle and Samba shoes.
JD’s poor UK performance was offset by strong sales growth in Europe and the US, which is JD’s biggest single market responsible for nearly 40% of sales. Group sales rose 5.2% to £5bn and pre-tax profit was up 64% to £126.3m for the half.
The group said it still expected to hit profit expectations of between £995m and £1bn for the full year but it said foreign exchange shifts had reduced profits by £6m in the first six months of the year and would bring a £20m hit in the second half.
