Unlock the Editor’s Digest for free
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
JD Sports said full-year profits would be at the lower end of its guidance range because of unseasonal weather and weak consumer demand ahead of the US election last month, sending its shares to a more than two-year low.
The UK-based sportswear retailer said annual pre-tax profit would be at the lower end of the £955mn to £1.035bn range after there had been “much softer demand” towards the end of its most recent quarter. It made a £917mn profit last year.
The chain, which has been expanding its reach beyond the UK, opened 79 new stores globally in its most recent quarter. It has trained its focus on the US as a driver of growth, and earlier this year acquired New York-listed rival Hibbett in a $1.1bn deal.
JD operates 4,541 stores, up 1,224 from the start of the year, it said on Thursday, including 1,179 that it added through the acquisition of Hibbett.
Like-for-like sales in North America dipped 1.5 per cent in the 13 weeks to November 2, compared with a 1.8 per cent rise for the region in the year to date. Global group revenue fell 0.3 per cent over the quarter.
Chief executive Régis Schultz said in Thursday’s trading update that the group had seen “evidence supporting suppressed demand in the US ahead of the election” towards the end of the quarter.
JD Sports is a major retailer of sportswear giants Nike and Adidas, which have both suffered from waning consumer demand this year. Nike’s shares lost a fifth of their value in June after it issued a profit warning. Last month, it reported a 10 per cent drop in quarterly sales and withdrew its full-year forecasts.
But Schultz has previously shrugged off the brand’s woes. “Nike will be fine, it’s a question of time, it’s a strong brand,” he said last month after JD Sports reported a 64.3 per cent fall in half-year pre-tax profits to £126.3mn.
The company’s shares dropped as much as 16.6 per cent in London trading, reaching their weakest level since October 2022. They have dropped more than 40 per cent so far this year.
In the most recent quarter, like-for-like sales at JD-branded stores fell 1.6 per cent compared with the same period last year, while revenues in the group’s sporting goods and outdoor category rose 6 per cent.
“Regionally, Europe performed well, delivering both [like-for-like] sales growth and organic sales growth, with softer trading in the period being seen elsewhere,” the company said.
In May, JD Sports entered talks to buy French sports retail rival Courir for €520mn, in what would be the first significant deal since Schultz took over last year.
Read the full article here