JD Sports warns on profits again in latest blow to high street
JD Sports warns on profits again in latest blow to high street
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High street leisure wear retailer JD Sports Fashion issued another profit warning today after sales fell in the run up to Christmas in a fresh setback for the battered high street. The business said it now expects pre-tax profits of between £915 million and £935 million for the financial year to February, down from previous City expectations of around the £955 million mark.
It is the second alert from the company in less than two months, In November JS Sports blamed a “volatile trading environment” for a warning that profits would be at the lower end of a range of between £955 million and £1 billion. The latest statement also marks a major climbdown from last year’s Christmas trading update when the company predicted profits for the year “will be just over £1 billion.”.
In a Christmas trading update today covering the nine weeks to 4 January. JD Sports said like for like revenue across November and December fell 1.5% “in a challenging and volatile market that saw increased promotional activity.” December itself was stronger with growth of 1.5%. Overall revenue growth for the nine week period was 3.4%.
CEO Régis 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.
“While I am pleased overall with our performance, market headwinds were higher than we anticipated and therefore our full year profit forecast is slightly below our previous guidance. With these trading conditions expected to continue, we are taking a cautious view of the new financial year.”.
