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JD Sports Fashion Plc warned its full-year profit would be at the lower end of market expectations as consumer confidence slumps in the UK.
The sports retailer said Thursday it is taking a “pragmatic approach” to its outlook, after its like-for-like sales dropped 1.7 percent in the third quarter. They dropped 3.3 percent in the UK.
Shares of JD Sports fell as much as 2.4 percent in early trading in London, before trimming the loss. They were down 16 percent this year through Wednesday’s close.
The warning on profit adds to evidence that British shoppers are feeling the strain ahead of the government’s budget next week, which is expected to raise taxes as Chancellor of the Exchequer Rachel Reeves tries to patch up the nation’s finances. Data published Thursday showed a slump in confidence on a range of metrics including economic growth and personal finances.
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JD Sports, led by chief executive officer Régis Schultz, said it was also hit by higher unemployment among its core demographic of 16- to 24-year-olds, as they pulled back on spending.
“There is nothing wrong with JD that a dose of economic confidence and a few strong product releases would not resolve,” Peel Hunt analyst Jonathan Pritchard said in a note. “However, both feel some way off and forecast momentum remains negative.”
In North America, JD’s biggest market, like-for-like sales fell 1.7 percent, which the retailer blamed on key product lines reaching the end of their cycle.
By Tala Ahmadi
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