JD Sports still on track despite North American slowdown

Softening in trade in US and Canada would be offset by growth in demand for its sportswear in the UK, Europe and Asia Pacific, company said

'The US performance will probably catch the headlines but Europe and the UK are in rude health', analysts said.

JD Sports said there had been some softening in trade in its North American business in June, which would be offset by growth in demand for its trendy trainers and sportswear in the UK, Europe and Asia Pacific.

Despite the slowdown in its US and Canadian markets, the retailer stuck to forecasts for pretax profit to come in at about £1.04bn (€1.2bn) for the 12 months to the end of January.

Its main competitors in North America were seeing a similar trend. In May, Foot Locker downgraded its outlook amid a sharp drop in demand as US consumers cut back on discretionary spend. 

Trading from about 3,400 stores in 32 countries, JD has been expanding rapidly, boosted by appetite from young adult shoppers who are less affected by rising bills and who seek out JD for special access to Nike and Adidas products.

The US warning sent shares in the FTSE 100-listed company down 4.5% at one stage. They are up 16% so far this year. "The US performance will probably catch the headlines but Europe and the UK are in rude health and have picked up any bottom-line slack," Peel Hunt analysts said. 

Across JD Sport's wider business, organic sales growth at constant exchange rates moderated to about 8% for May from the 15% growth it reported for the first three months of its financial year, in line with its expectations. 

• Reuters