By Andrea Figueras

Shares in JD Sports Fashion dropped after the London-listed group, which sells sneakers and sports fashion items from brands such as Nike and Adidas, reported a decline in first-quarter sales in the key North American market.

The stock was 7.2% lower at 86.24 pence in European morning trading. Since the start of the year, shares are down 10%.

For the three months to May 3, the U.K. retailer booked a 2% decline in sales on a like-for-like basis compared with the prior-year period. The drop was more pronounced than expected, with Visible Alpha consensus having anticipated a 1.1% decrease, RBC Capital Markets analysts Richard Chamberlain and Manjari Dhar wrote in a note to clients.

The company noted that the performance was in line with its expectations amid what it called a volatile market environment.

In North America, first-quarter sales fell 5.5%, also worse than the 1.2% decline estimated by the consensus, RBC Capital Markets said.

"The region was a negative surprise and despite management's explanation attributing it to timing shifts in product launches, it could still heighten concerns, particularly in the context of an uncertain consumer outlook for the second half of the year," UBS analysts said in a research note.

Besides the potential impact of President Trump's tariffs on prices, the group is highly exposed to Nike, which still has work to do on its recovery, Shore Capital analyst David Hughes wrote in a note. Weakness in the U.S. remains a concern and the country could remain a point of softness for the company in fiscal 2026, Hughes added.

Trump recently announced duties on imported goods from major sourcing hubs for footwear and apparel, including China, Vietnam and Cambodia, among other Asian countries. The levies were later suspended for 90 days, though tariffs on some products remain in place.

The company warned that tariffs could hinder demand from U.S. customers and affect its brand partners, who source most of their products from South East Asia. However, the U.K. company said it is implementing mitigating measures and noted that it doesn't consider the potential hit of the levies on the company to be material.

JD Sports Fashion has the opportunity to broaden its customer base in the U.S. and other regions, but its recent acquisitions haven't so far delivered the returns the market was expecting, RBC Capital Markets said. Last year, the company bought Birmingham, Ala.-based Hibbett to boost its presence in the U.S., a key market for sporting-goods companies.

However, the Dick's Sporting Goods takeover plans of Foot Locker, which were recently unveiled, could increase competitive pressures over the medium term, UBS analysts said.

Write to Andrea Figueras at andrea.figueras@wsj.com

(END) Dow Jones Newswires

May 21, 2025 04:31 ET (08:31 GMT)

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