JD Sports lowers profit forecast in "volatile" market

In a pre-close trading update, sportswear retailer JD Sports said that like-for-like (LFL) revenue across November and December was down 1.5 percent, in a challenging and volatile market that saw increased promotional activity.

The company now expects profit before tax and adjusting items to be between 915 million pounds and 935 million pounds compared to guidance in November when it expected profit at the lower end of the 955 million pounds to 1.035 billion pounds range.

“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,” said Régis Schultz, CEO of JD Sports Fashion Plc.

During the Christmas period, LFL revenue in December was up 1.5 percent.

Schultz added: “Considering the current headwinds in the market, we performed well, delivering organic revenue growth of 3.4 percent across the period, and a strong Christmas resulted in LFL revenue growth in December.”

Footwear sales grew and were ahead of the apparel category, while stores outperformed the online channel. JD reported a strong LFL revenue performance through the period from sporting goods and outdoor segment.

By region, LFL revenue grew in Europe and Asia Pacific partially offset by weaker LFL trading across the UK and North America. In terms of the company’s recent acquisitions, Hibbett traded slightly ahead of the North America business and Courir traded well across the weeks following acquisition.

The company’s year-to-date, LFL revenue remained flat and JD expects full year LFL revenue to be at a similar level to this. Organic revenue growth in the period was 3.4 percent and the full year organic revenue growth is forecasted to be around 5 percent and gross margin to be around 48 percent, in line with last year.