JD Sports cuts profit forecast after “softer” Christmas trading period
Sales at JD Sports came in slightly behind the retailer’s expectations in the lead-up to Christmas as consumers were more cautious in their spending.
For the 22 weeks to 30 December, constant currency organic revenue growth was 6% with like-for-like growth of 1.8%.
The retailer said its clothing sales were impacted by milder weather from the second half of September. Trading was also affected by the sportswear market being softer and more promotional than anticipated.
Régis Schultz, chief executive of JD Sports, said: “We have made good progress against our five-year strategic plan, delivering global organic revenue growth of 6% in the period, against very tough comparisons with last year, and opening over 200 new JD stores in the year. Our key markets have seen increased promotional activity during the peak trading season, driven by a more cautious consumer, but we continue to grow market share.”
The retailer’s gross margin rate was in line with last year and lower than expected due to the elevated level of promotional activity.
JD Sports now expects organic revenue growth to be at around 8% and pre-tax profit before adjusted items to come in at between £915 million and £935 million in the year to 3 February. This is down from previous expectations of £1.04 billion.
Schultz said: “We are confident in our strategy and we continue to invest in our supply chain, systems and stores, supported by our strong cash generation and healthy balance sheet.”