JD Sports has cut profit expectations for the second time in eight weeks, blaming heavy discounting across the fashion market.

The retailer said it did not expect any growth in sales at established stores during the year and warned that annual profits would be no more than £935m, down from previous hopes of between £955m and £1.03bn.

Shares in JD, which also owns the Size?, Blacks and Millets brands in the UK, fell 10% as it cut forecasts below its previous expectations and warned of a tough economic backdrop for retailers.

The JD Group chief executive, Régis Schultz, said: “With these trading conditions expected to continue, we are taking a cautious view of the new financial year.”

Sales at established stores were down 1.5% in November and December in a “challenging and volatile market that saw increased promotional activity”, as a rise in sales in the final weeks of the year failed to offset a poor November.

Trading in the UK and US was particularly weak, while its stores outperformed its online arm, in contrast with Christmas trading at other listed fashion retailers, such as Marks & Spencer and Next.

JD – which also owns the Finish Line brand in the US and SportsZone and Sprinter in mainland Europe – said footwear sales were up, outperforming clothing, in the final two months of 2024, while the outdoor and camping goods chains outperformed fashion.

JD’s poor performance comes amid a difficult period for fashion retail in the UK as a warm autumn and start to the winter held back sales of more expensive items such as boots and coats, while storms disrupted trips to the high street in many parts of the country.

The sports brand Nike has also been struggling with competition from up and coming brands and fears that athleisure styles are becoming less fashionable.

High energy bills and increasing mortgage and rental costs for many continue to affect spending on non-essentials, while households appear to have prioritised holidays or other experiences over fashion.

With lots of stock to clear, many retailers began discounting early.

Schultz said: “In line with our proven long-term approach, we chose not to participate in what was a more promotional environment in the period than we anticipated, fully maintaining our trading discipline to deliver gross margins ahead of last year, clean inventory and strong cash management.”

Analysts said they were downgrading profit expectations for next year as well as this, reflecting the fear that the challenging market will persist.

Analysts at Peel Hunt said they expected JD to continue to lead the market and to be among the first to benefit if Nike saw an improvement in trading. Jonathan Pritchard, an analyst at Peel Hunt, said: “JD hasn’t done much wrong – it will not enter into a race to the bottom by discounting, which impacts sales and profitability.”