JD Sports' UK operations have suffered a fall in sales as disruptions in the Red Sea disrupted deliveries and a cold, wet spring reduced demand for camping kit and clothing.
The retail group that owns Millets and Blacks in the UK has announced that it will be cutting back on outdoor gear after Houthi attacks off the coast of Yemen have affected “key product lines”, causing delays and rerouting deliveries. The chain said sales fell 5.3% in the six months to August 3. This is the first time since 2018 that the early days of Easter fall outside of the camping season.
The company said poor weather conditions had further exacerbated the problem, reducing demand for seasonal outdoor living items such as tents and camping equipment.
The cold and wet weather has also affected the group's main UK JD Sportswear chain, with sales at existing stores in what the group describes as a “challenging and often volatile UK market”. decreased by 4.6%.
JD said the market discounts increased sharply due to “unfavorable weather conditions in spring and early summer, decreased customer footfall, and fixed price demand for seasonal items (clothing).”
Strong sales of replica soccer kits during the Men's European Championships helped boost sales, but the reliance on these low-margin, high-sale products hurt profits, which fell by 14%.
JD Sports stock fell 4.5% in early trading Wednesday.
The weak performance in the UK was offset by strong sales growth in Europe and the US, JD's largest single market. Group sales for the half year increased by 5.2% to £5.0bn and pre-tax profit increased by 64% to £126.3m.
The group said it still expects its full-year profit forecast of £995m to £1bn to be met, but currency fluctuations will reduce profits by £6m in the first half of this year, taking the full year into a £20m hit. He said it would happen. Second half.
“This progress is driven by promotions, a competitive market, and continued economic uncertainty,” said Regis Schultz, chief executive officer of JD Sports.
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“Our ability to navigate these complexities speaks to the strength and agility of our business model and our people.”
Despite the struggles of some major brands, such as Nike, Schulz said, “The global sportswear market, particularly the athleisure sector, continues to see favorable trends such as casualization and active lifestyles.'' “We are confident that structural growth will continue for many years to come.”
