JD Sports Fashion Adjusts Profit Outlook to Lower End After 'Volatile' October

2 min read | November 21, 2024 12:06 AM PST | By Team Kalkine Media

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JD Sports Fashion Adjusts Profit Outlook to Lower End After 'Volatile' October — Image source: Shutterstock

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Highlights:

JD Sports Fashion reports lower-than-expected profits for the full year due to a challenging trading environment in October.

Like-for-like sales fell by 0.3% in the third quarter, while organic group revenue rose by 5.4%.

Regional sales varied, with Europe seeing a 3.5% increase, while the UK, Americas, and Asia Pacific experienced declines.

JD Sports Fashion (LSE:JD) has updated its full-year profit forecast, indicating that profits will likely fall at the lower end of the expected range following a difficult trading environment in October. The company cited several factors contributing to this weaker-than-anticipated performance, including heightened promotional activity, unseasonably mild weather, and a cautious consumer outlook ahead of the US election.

In a trading update issued on 21 November 2024, JD Sports reported a 0.3% decline in like-for-like sales for the third quarter, despite a 5.4% increase in organic group revenue. This reflects a mixed performance across different regions. While Europe bucked the trend with a 3.5% rise in sales, other key markets struggled. Like-for-like sales in the UK dropped by 2.4%, in the Americas by 1.5%, and in Asia Pacific by 3.8%.

The company’s chief executive, Regis Schultz, explained that while the back-to-school period was strong, the demand softened significantly towards the end of the period. Elevated discounts, coupled with the impact of warmer-than-usual weather, led to weaker sales. Consumer caution, particularly in the US ahead of the election, also dampened demand. Despite the volatile market conditions, JD Sports maintained its focus on long-term commercial strategy rather than pursuing short-term sales growth.

As a result of this strategy, the company managed to achieve a 0.3 percentage point increase in its gross margin, bringing it to 48.1%. The year-to-date figure remains in line with the previous period. This disciplined approach underscores the company’s commitment to sustainable growth amid challenging conditions.

JD Sports continues to closely monitor market trends and will provide further updates as necessary.

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