JD Sports Fashion PLC (LSE:JD.) shares were one of the biggest fallers in the FTSE 100 fallout from Donald Trump's new tariff announcement, ahead of a trading update from the sportswear retailer next Wednesday, 9 April.
A near-10% fall dragged the stock to 64p, lows last seen in 2017.
Investors will be keen to hear what the likely impact of the tariffs will be on the UK group, which is a key partner for Nike, Adidas and other global sportswear giants, and also has a strong presence in the US and Europe.
The increased US tariffs on Asian imports are expected to have a significant impact on the European sportswear sector, with Nike shares falling around 7% in US afterhours trading and Adidas plunging 9.5% in Germany.
Analysts at UBS highlighted that Vietnam’s 46% tariff is materially worse than had been assumed, with the country a major exporter of footwear to the US and a key manufacturing base for the sector.UBS said companies may not be able to fully offset the impact, and initial reactions could be negative.
UBS said fully offsetting Vietnam-specific tariffs would require price increases of around 10-12%, which may be difficult to implement, with shifting production to other countries difficult or even pointless due to wider proposed tariffs on other Asian countries.
For JD, analysts at Hargreaves Lansdown said the FTSE 100 group has "had a tough time of late" as the retailer looks to hold firmer on pricing as many of its peers lean into promotional activity to help clear inventory.
"While that’s protecting margins a little, profits and cash flows are still getting hurt."
In January, JD warned of lower revenue and profit through the end of 2024, citing challenging market conditions.
Chief executive Régis Schultz guided to pre-tax profit of between £915 and £935 million, on full-year organic revenue growth of around 5%.
He said market headwinds were higher than anticipated and these trading conditions expected to continue, leading to "a cautious view of the new financial year".
Markets are forecasting revenue growth of around 10% to £12.6 billion this year, helped by new store openings and acquisitions of Hibbett in North America and France's Courir last year.