Companies

JD Sports cuts full year profit guidance amid challenging market conditions

Jan 15, 2025 United Kingdom

The UK-based retailer has posted a solid trading update for the third quarter of its fiscal year, but has lowered its full year profit guidance in recognition of challenging and volatile market conditions

“Considering the current headwinds in the market, we performed well, delivering organic revenue growth of 3.4% across the period, and a strong Christmas resulted in LFL revenue growth in December (…). 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”, commented Régis Schultz, CEO of JD Sports Fashion.

Trading Update

In the nine weeks to the 4^th of January, the company’s like-for-like revenue increased by 1.5% year-over-year, amid a challenging and volatile market with increased promotional activity.

In this context, JD Sports highlighted that footwear sales growth outpaced apparel and that its stores outperformed its online channel. Regionally, LFL sales growth in Europe and Asia Pacific partially offset weaker LFL trading in the UK and North America.

In terms of recent acquisitions, Hibbett traded slightly ahead of the wider North American business and Courir traded well in the weeks following the acquisition.

Overall, the sports retailer reported that year-to-date LFL revenue was flat and full year LFL revenue is expected to be similar. Meanwhile, organic revenue growth for the period was 3.4% and full year organic revenue growth is expected to be around 5%.

In addition, gross margins for the period are ahead of last year and the full year’s gross margin is expected to be around 48%, in line with last year’s.

However, Schultz added: “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”.

Therefore, JD Spots now expects the full year profit before tax and adjusting items to be between 915 million (1.08 billion) and 935 million (1.10 billion) British pounds.

Image Credits: ubbo.pt

United Kingdom Companies Footwear JD Sports Quarter Results Results Sportswear