- Group now expects full year 2025 organic revenues 8% ahead
- Year-to-date shares down 25%
- Expects pre-tax profits between £915 million and £935 million
Shares in JD Sports Fashion (JD.) fell over 20% to 123p in morning trading as the sports fashion retail group reported 6% organic revenue growth for the 22 weeks to 30 December 2023, slightly behind company expectations.
The company said it expects full year organic revenue growth to be around 8%.
In terms of the full year ending 3 February 2024, the group said it estimates a profit before tax and adjusted items to be between £915 million and £935 million.
The trading update – which was unscheduled – has highlighted weaker-than-expected sales in apparel revenue growth due to mild weather from mid-September and ‘softer overall demand’ and ‘higher promotional activity than it anticipated and so a sales miss.’
JD Sports Fashion now expects full year 2025 organic revenues to be circa 8% ahead year-on-year.
Why JD Sports Fashion shares are down despite record profits
Russ Mould, investment director at AJ Bell said: ‘News from JD Sports that full-year pre-tax profit will be up to 12% below the £1.04 billion guidance given last September has disappointed the market.
‘JD is not alone in having to slash prices to shift stock as consumers continue to battle the impact of high interest rates and simply cannot afford everything they may want. Plenty of other names in the retail sector have recently given similar messages about a slowdown in sales growth and/or the need to run big promotions, including Zara’s owner Inditex, H&M and ASOS.
‘JD’s products fall into the discretionary spending category – they are nice to have, but not essential. When times are hard, consumers are going to prioritise their spending in favour of things they really need.’
ANALYSTS CAUTIOUS
Clive Black and Bradley Hughes at Shore Capital said in a research note: ‘The group speak to ‘good progress’ against its five-year strategic plan, but the market has taken its toll on the share price with this news. We see a lot to like in JD Sports Fashion not least its balance sheet, but confidence in earnings estimates is a pre-condition of a positive equity case.’
