JD Sports has cut profit expectations sending its struggling share price tumbling as the Bury-based retail giant blames heavy discounting and stock clearance across the fashion market.
The retailer said it did not expect any growth in sales at all at established stores during the year, and warned that annual profits would be no more than £935m, down from previous hopes of between £955m and £1.03bn. The forecast suggests JD will miss its billion-pound profit target for a second year running.
Shares in JD, which also owns the Size?, Blacks and Millets brands in the UK, fell 10% yesterday as it cut forecasts and warned of a tough economic backdrop for retailers.
READ MORE: How JD Sports started as a shop in Bury and became a global retail giant
The JD Group chief executive, Régis Schultz, said: “With these trading conditions expected to continue, we are taking a cautious view of the new financial year.”
Sales at established stores were down 1.5% in November and December in a “challenging and volatile market that saw increased promotional activity,” as a rise in sales in the final weeks of the year failed to offset a poor November.
Trading in the UK and US was particularly weak, while its stores outperformed its online arm, unlike Christmas trading at other leading fashion retailers like Marks & Spencer and Next.
In betetr news, JD said footwear sales were up, outperforming clothing, in the final two months of 2024, while the outdoor and camping goods chains outperformed fashion, perhaps surprisingly given that storms and severe whether also played a part in disrupting high street sales nationwide towards the end of the year.
Schultz said: “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.”
Analysts said they were downgrading profit expectations for next year as well as this, reflecting the belief that the challenging market will persist.