JD Sports encountered a sales slump in October, impacting their annual profit expectations.
- The decline is largely attributed to mild weather in the UK and US.
- Third-quarter revenue dropped slightly compared to the previous year.
- Despite opening new stores, the company experienced trading volatility.
- JD Sports remains poised for the upcoming peak trading season.
JD Sports experienced a noticeable decline in sales during October, leading the company to revise its profit forecasts for the year. The unseasonably mild weather in both the UK and the US emerged as a significant factor dampening consumer demand. This shift in climate patterns contributed to weaker sales performance as autumn apparel and footwear did not align with consumer needs.
The third-quarter financial results reveal a complex landscape. On a like-for-like basis, the group’s revenue fell by 0.3% year-on-year, though there was a 5.4% increase noted in organic terms compared to the previous year. In the UK, like-for-like revenue notably decreased by 2.4%, further substantiating the impact of the mild October weather on consumer purchasing behaviors.
CEO Régis Schultz highlighted the challenges faced in October, despite starting the period strong with successful back-to-school sales. Schultz remarked on the increased trading volatility, particularly in North America and the UK, stemmed from heightened promotional activities and the unexpected weather conditions. He acknowledged that while the company performed well in significant trading events, the unstable market conditions have necessitated a reassessment of profit expectations to the lower end of the anticipated range, between £955 million and £1 billion.
As part of its expansive strategy, JD Sports opened 79 new stores during the third quarter, bringing the total to 4,541 by November 2. This expansion was significantly bolstered by the acquisition of 1,179 stores from US competitor Hibbett. The strategic growth reflects JD Sports’ commitment to strengthening its global presence despite short-term market challenges.
Looking ahead, JD Sports is strategically positioned to navigate the imminent peak trading season. While the trading environment remains unpredictable, the company aims to leverage its robust network to capture market opportunities. This readiness underscores JD Sports’ resilience and adaptability in face of ongoing economic fluctuations.
JD Sports is adapting its strategies to overcome current challenges and is ready to take on future market opportunities.
