JD Sports suffers sales downturn
Published 23/11/2011 | 08:49
FASHION retailer JD Sports today showed it was not immune from the consumer spending squeeze as it reported a fall in sales after a long spell as one of the shining lights on the high street.
The group, which operates 350 JD Sports and Size? outlets in the UK, said like-for-like sales excluding VAT in the 16 weeks to November 19 fell 1.5pc, compared to 1.6pc growth in seven weeks to September 17.
The Bury-based retailer said since mid-September a marked decline in consumer confidence has hit the business and warned a tough Christmas was coming.
JD Sports has outperformed its rival JJB Sports, which reported a £66 million loss at the half year stage, but the wider retail sector has come under pressure amid rising prices, muted wage growth and low confidence.
Shares in JD Sports fell nearly 8pc following today's update.
David Jeary, an analyst at brokers Investec, maintained his forecast for full year pre-tax profits at £72 million, which would represent a 13pc drop on the previous year.
Mr Jeary said: "Falling consumer confidence and pressure on discretionary incomes is not a winning combination for most retailers."
He added: "While current trading conditions are undoubtedly challenging, JD's conservative management style, strong roster of brands and international growth opportunities offer more significant longer-term potential."
The company reported a 1.6pc decline in its sports stores, which include JD Sports and Size?, and a 0.9pc decline in its 124 fashion stores, which include the Bank and Scotts chains.
JD Sports said it was experiencing "adverse pressure" on its profit margins but was working hard to maintain them and reassured that it had a "good track record" for making the most of the key festive season.
The group opened two further JD stores in France in the period and also plans to open its first JD stores in Spain next year after the acquisition of the Sprinter chain.
JD warned the performance of the Champion brand in Ireland is still being hit by the weak economic environment, but its Canterbury chain in Australia and New Zealand was boosted by the Rugby World Cup.