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- The company’s forecast annual pre-tax profits range from £955m to £1.04bn.
- It noted a “volatile trading environment” and subdued sales during October.
JD Sports Fashion Stock plunged on Thursday after the retailer warned that full-year profits would fall short of previous forecasts, following “volatile” trading last month.
The group told shareholders that October trading was affected by higher levels of discounting, unfavorable weather conditions and subdued consumer spending, with the retailer citing the US presidential election as a possible factor.
JD Sports anticipates pre-tax profits for the year ending February 2025 will be at the lower end of its guidance range of £955 million to £1.04 billion, due to a “volatile trading environment” and moderate sales during October.
Shares in the sportswear company plunged 17 per cent in early trading before recovering modestly to be around 14 per cent lower at 97.3p just before midday.
Bury-based JD Sports hopes to become one of the few British retailers to achieve £1bn in annual pre-tax profits, a feat shared only by Tesco, Marks & Spencer and Screwfix owner Kingfisher.
However, it missed the target last year, blaming milder weather in late September and “high market promotional activity,” especially during the peak Christmas season.
Challenging backdrop: JD said last month’s trading was impacted by higher discount levels, unfavorable weather conditions and subdued consumer spending.
The company’s comparable revenue has increased approximately 0.5 percent since the beginning of the year, although organic revenue has increased 6.1 percent.
JD has enjoyed strong growth in Europe and North America, where its organic sales increased 10.1 percent and 9.1 percent, respectively, in the nine months ended November 2.
This offset stagnant demand in the UK, where the company sold multiple sub-brands, including Tessuti, Nicholas Deakins and Pretty Green, to Mike Ashley’s Frasers Group.
Régis Schultz, CEO of JD Sports Fashion, said: “We have performed well at key trade events this year and are well positioned for the upcoming peak season.”
JD has expanded its store space by more than a third to 4,541 outlets since the beginning of February, largely thanks to the acquisition of 1,179 stores as part of its acquisition of US sporting goods supplier Hibbett.
Another acquisition deal it has agreed – the €520 million purchase of French sneaker seller Courir – recently received conditional approval from European regulators.
The European Commission ordered the company to sell all Courir stores in Portugal and some stores in certain French regions to Snipes.
Aarin Chiekrie, equity analyst at Hargreaves Lansdown, said JD “is taking a risk by expanding capacity ahead of the market recovery.”
He added: “It is not likely to become a crown jewel in the short term, but could pay dividends in the future as market conditions and consumer confidence improve.”
Founded in 1981, JD Sports has stepped up its acquisition spree in recent years, buying majority stakes in companies such as Missy Empire, Crete-based Cosmos Sport and Spanish retailer Deporvillage.
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