Shares of JD Sports are plummeting as the sportswear retailer softens expectations

JD Sports Fashion Stocks fell on Thursday after the retailer warned that full-year profit was likely to be at the lower end of forecasts following last month’s ‘volatile’ trading.

The group told investors that October trading was affected by higher discount levels, adverse weather conditions and subdued consumer spending, with the retailer citing the US presidential election as a possible factor.

JD Sports expects pre-tax profits for the year ending February 2025 to be at the lower end of its guidance range of £955m to £1.04bn due to a ‘volatile trading environment’ and subdued sales in October.

Shares in the sportswear company tumbled 17 percent in early trading before recovering modestly to settle around 14 percent lower at 97.3p just before midday.

Bury-based JD Sports hopes to become one of the few UK retailers to achieve annual pre-tax profits of £1 billion, a feat shared only by Tesco, Marks & Spencer and Screwfix owner Kingfisher.

However, the target was missed last year, with milder weather in late September and ‘increased market promotion activities’ blamed, especially during the peak Christmas season.

The company’s like-for-like sales are up about 0.5 percent since the start of the year, while organic sales are up 6.1 percent.

JD experienced strong growth in Europe and North America, where organic sales grew 10.1 percent and 9.1 percent, respectively, in the nine months ended November 2.

This offset the flattening of UK demand, where the company sold several non-core brands, such as Tessuti, Nicholas Deakins and Pretty Green, to Mike Ashley’s Frasers Group.

Régis Schultz, CEO of JD Sports Fashion, said: “We performed well at this year’s key trade events and we are well positioned for the upcoming high season.”

JD has expanded its store base by more than a third to 4,541 stores since early February, largely through the acquisition of 1,179 stores as part of its takeover of US sporting goods supplier Hibbett.

Another takeover deal the company has completed – the €520 million purchase of French trainer seller Courir – recently received conditional approval from regulators in Europe.

The European Commission has ordered the company to sell all Courir stores in Portugal and some stores in particular the French regions to Snipes.

Aarin Chiekrie, equities analyst at Hargreaves Lansdown, said JD was “taking a risk by expanding capacity ahead of the market recovery.”

He added: ‘It’s not likely to become a jewel in the crown any time soon, but it could pay dividends over time as market conditions and consumer confidence improve.’

JD Sports, founded in 1981, has stepped up its acquisition spree in recent years, buying majority stakes in Missy Empire, Crete-based Cosmos Sport and Spanish retailer Deporvillage, among others.