JD Sports downgrades FY profit forecast

(Sharecast News) - JD Sports Fashion downgraded its full-year profit forecast on Tuesday as it posted a drop in revenue for November and December in challenging markets. In an update for the nine weeks to 4 January, the retailer said like-for-like revenue across the two months fell 1.5% "in a challenging and volatile market that saw increased promotional activity".

The company said its Christmas performance was strong, with LFL revenue in December up 1.5%. Footwear sales grew and outperformed apparel, and stores outperformed the online channel.

The Sporting Goods and Outdoor segment saw a strong LFL revenue performance through the period, while LFL revenue growth in Europe and Asia Pacific partially offset weaker LFL trading across the UK and North America.

LFL revenue in the year to date is flat, it said, and the retailer expects the full-year outcome to be similar.

Organic revenue growth in the nine-week period was 3.4% and JD expects full-year organic revenue growth to be around 5%.

The group now expects full-year pre-tax profit of between £915m and £935m, down from previous guidance of £955m to £1.035bn.

Chief executive 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."