JD Sports Slumps as North America Sales Drop 6.8%

JD Sports shares took a significant hit on Thursday morning in London trade, plummeting 12.1% to 82.12 pence. This decline erased an estimated £545 million of equity value from the company's valuation.

The drop was largely attributed to a weakened North American market, where like-for-like sales dropped 6.8% in the second quarter. JD Sports Fashion plc lost about £545 million of equity value on Thursday morning after cutting its forecast for profit before tax and adjusting items to £700 million, £800 million.

The new midpoint is 6.3% lower than the prior range of £750 million, £850 million, with last year's result being £852 million. Chief Executive Régis Schultz attributed this change to a 'pragmatic view of external market conditions', citing soft footwear demand and highly promotional U.S. market as contributing factors.

Analysts are cautioning that a sustained recovery is unlikely until downgrades stop, with concerns over excess stock and Nike's slow momentum also weighing on the company's prospects. The next catalyst for improvement may be inventory clearance rather than a valuation alone, according to Kate Calvert of Investec.