JD Sports Fashion PLC expects annual profit will be at the lower end of guidance after depressed third-quarter sales, it said on Thursday.
Shares in the Manchester, England-based sportswear retailer fell on Thursday morning, as a decent start to the quarter was damped by a ‘volatile’ October.
JD Sports shares were down 12% at 99.34 pence each on Thursday morning in London. They are down 31% over the past 12 months.
Annual adjusted pretax profit is anticipated at the lower end of the £955 million to £1.04 billion range that JD Sports previously guided. This still would represent at least a 4.1% increase from the £917.2 million recorded in the 53 weeks to February 3, its prior financial year.
The October slowdown was reflected in like-for-like sales, which fell by 0.3% in the third-quarter, putting year-to-date LFL sales growth at 0.5%. JD Sports attributed the slump to ‘unseasonable weather and a cautious consumer’ in the 13 weeks to November 2, alongside ‘suppressed demand in the US ahead of the election’.
In the third quarter, LFL sales were down 2.4% in the UK, 1.5% in the US and 3.8% in Asia Pacific. Europe defied the slump, with LFL sales in the third quarter up 3.5% on year. Globally, stores continued to outperform online, and footwear continued to outperform apparel on a LFL basis, the company said.
On an organic basis, sales were up by 5.4% in the third-quarter. They were down 0.1% in the UK, but up 5.9% in North America and up 5.0% in Asia-Pacific. Europe again outperformed, with organic sales up 10%.
This left company-wide year-to-date organic sales growth at 6.1%.
JD Sports said the rollout of 79 new stores had boosted organic sales and reported ‘good progress’ on its bid for French sneaker retailer Courir, saying it had satisfied all regulatory conditions and expected to complete the acquisition ‘shortly’. JD Sports provided no further details on the acquisition timeline.
US subsidiary Hibbett Inc is still expected to contribute around £25 million to PBT, with currency reducing PBT by £15 million based on current exchange rates.
JD Sports completed the $1.08 billion acquisition of Birmingham, Alabama-based retailer Hibbett back in July.
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